FORM 10-K
54
MDU RESOURCES G ROUP, INC.
PART II
Construction Services
Years ended December 31,
2007
2006
2005
(In millions)
Operating revenues
$1,103.2
$987.6
$687.1
Operating expenses:
Operation and maintenance
979.7
892.7
625.1
Depreciation, depletion and amortization
14.3
15.4
13.4
Taxes, other than income
33.7
28.8
20.4
1,027.7
936.9
658.9
Operating income
75.5
50.7
28.2
Earnings
$
43.8
$ 27.8
$ 14.6
2007 compared to 2006 Construction services earnings increased $16.0 million (57 percent) due to:
· Higher construction margins and workloads of $13.1 million (after tax), largely in the Southwest and Central regions, including
industrial-related work
· Increased equipment sales and rentals
2006 compared to 2005 Construction services earnings increased $13.2 million (91 percent) due to:
· Higher construction workloads and margins of $7.3 million (after tax), largely in the Southwest region
· Earnings from acquisitions made since the comparable prior period, which contributed approximately 43 percent of the earnings increase
· Higher equipment sales and rentals
Partially offsetting this increase were higher general and administrative expenses of $1.7 million (after tax), primarily payroll related.
Pipeline and Energy Services
Years ended December 31,
2007
2006
2005
(Dollars in millions)
Operating revenues
$447.1
$443.7
$477.3
Operating expenses:
Purchased natural gas sold
291.7
311.0
363.7
Operation and maintenance
65.6
52.8
49.8
Depreciation, depletion and amortization
21.7
13.3
12.5
Taxes, other than income
10.1
9.5
7.8
389.1
386.6
433.8
Operating income
58.0
57.1
43.5
Income from continuing operations
31.4
32.1
22.9
Income (loss) from discontinued operations, net of tax
.1
(2.1)
(.8)
Earnings
$ 31.5
$ 30.0
$ 22.1
Transportation volumes (MMdk):
Montana-Dakota
29.3
31.0
31.4
Other
111.5
99.9
73.5
140.8
130.9
104.9
Gathering volumes (MMdk)
92.4
87.1
82.1
2007 compared to 2006 Pipeline and energy services earnings increased $1.5 million (5 percent) due largely to:
· Higher transportation and gathering volumes ($5.4 million after tax)
· Increased income from discontinued operations of $2.2 million (after tax), related to Innovatum. For further information, see Item 8 -- Note 3.
· Increased storage services revenue ($2.2 million after tax)
· Higher gathering rates ($1.4 million after tax)
Partially offsetting this increase in earnings were:
· Absence in 2007 of the benefit from the resolution of a rate proceeding of $4.1 million (after tax) recorded in 2006, which is reflected
as a reduction to depreciation, depletion and amortization expense
