2
MDU RESOURCES G ROUP, INC.
report to
stockholders
Strong operating performance
Long-term investors know that our company
$1.76 per share, diluted. We believe
has experienced tremendous success. Each
earnings from continuing operations provide
As our financial results indicate, we had
milestone has been accompanied by a
a better comparison of year-to-year
strong operating performance in each of
growing expectation -- from our shareholders,
operating performance. Total revenues
our three lines of business -- energy,
from those we serve and from ourselves --
for the year reached $4.2 billion.
construction materials and utility resources.
of even greater accomplishments.
In August, we increased our quarterly
Our exploration and production business
That is part of what makes 2007 particularly
common stock dividend by 7.4 percent
aggressively expanded its three-pronged
remarkable. Although each of the past few
to 14.5 cents per share, or 58 cents per
growth strategy, which is built around
years has been outstanding in its own
share on an annualized basis. This was
developing existing reserves, acquiring
right, our employees' achievements this
the 17th consecutive year of dividend
properties with existing production, and
past year were exceptional. We once again
increases, an accomplishment matched
exploration in high-potential areas.
increased the financial value delivered to
by fewer than 5 percent of publicly traded
Participation in more than 360 new
shareholders. Operating performance was
North American businesses. We have
wells, principally in our existing Rocky
strong. We also made a number of
provided investors with 70 consecutive
Mountain areas, pushed natural gas and
acquisitions that will help us accomplish
years of uninterrupted dividend payments,
oil production to record levels and helped
even more in the future.
stretching back to 1937.
us retain our position as the largest natural
Fifth year of record earnings
We also continued to deliver outstanding
gas producer in Montana. We believe
2007 was the fifth consecutive year
value to investors, with a one-year total
there is strong potential for continued
of record earnings, with earnings of
return to shareholders of 10 percent. Our
growth, based on our strong reserve
$431.4 million, or $2.36 per common
total average annual return for the five-year
position. We hold approximately 707 billion
share, diluted. Earnings from continuing
period ending in 2007 was 22 percent,
cubic feet equivalent of proved reserves.
operations, which exclude the gain from
which outperformed the S&P 500. In
In addition, in June we estimated probable
the sale of our domestic independent
November, the Edison Electric Institute
and possible reserves of 800 Bcfe, about
power business and certain related
presented the company with its Index
half of which are probable.
income, totaled $322.1 million, or
Award, which recognizes the best total
Early this year, we purchased natural
shareholder returns among shareholder-
gas properties in eastern Texas that will
owned electric utilities. Our total return of
increase our total reserves by about
$4.2
$4.0
212 percent for the five-year period ending
14 percent. The purchase includes
$3.4
September 30, 2007, led all companies in
significant existing production, which
EEI's small-cap category.
$2.7
we plan to increase this year with 25
$2.3
In July, we completed the sale of our
additional wells. We expect that the
domestic independent power business
acquisition will increase our projected
for a gain of $91.5 million, after tax. The
2008 production growth in the range
sale took advantage of a strong market
of 12 percent to 16 percent, up from our
for electric generating facilities. The
original expectation of a 5 percent to
03
04
05
06
07
funds have been used to help grow our
8 percent increase.
revenues
remaining businesses.
(billions)
