ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
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THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
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THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
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41-0423660
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Abbreviation or Acronym
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2011 Annual Report
|
Company's Annual Report on Form 10-K for the year ended December 31, 2011
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Alusa
|
Tecnica de Engenharia Electrica - Alusa
|
ASC
|
FASB Accounting Standards Codification
|
BART
|
Best available retrofit technology
|
Bbl
|
Barrel
|
Bicent
|
Bicent Power LLC
|
Big Stone Station
|
450-MW coal-fired electric generating facility near Big Stone City, South Dakota (22.7 percent ownership)
|
BLM
|
Bureau of Land Management
|
BOE
|
One barrel of oil equivalent - determined using the ratio of one barrel of crude oil, condensate or natural gas liquids to six Mcf of natural gas
|
Brazilian Transmission Lines
|
Company's equity method investment in the company owning ECTE, ENTE and ERTE (ownership interests in ENTE and ERTE were sold in the fourth quarter of 2010 and portions of the ownership interest in ECTE were sold in the fourth quarters of 2011 and 2010)
|
Btu
|
British thermal unit
|
Cascade
|
Cascade Natural Gas Corporation, an indirect wholly owned subsidiary of MDU Energy Capital
|
CELESC
|
Centrais Elétricas de Santa Catarina S.A.
|
CEM
|
Colorado Energy Management, LLC, a former direct wholly owned subsidiary of Centennial Resources (sold in the third quarter of 2007)
|
CEMIG
|
Companhia Energética de Minas Gerais
|
Centennial
|
Centennial Energy Holdings, Inc., a direct wholly owned subsidiary of the Company
|
Centennial Capital
|
Centennial Holdings Capital LLC, a direct wholly owned subsidiary of Centennial
|
Centennial Resources
|
Centennial Energy Resources LLC, a direct wholly owned subsidiary of Centennial
|
Clean Air Act
|
Federal Clean Air Act
|
Colorado State District Court
|
Colorado Thirteenth Judicial District Court, Yuma County
|
Company
|
MDU Resources Group, Inc.
|
dk
|
Decatherm
|
Dodd-Frank Act
|
Dodd-Frank Wall Street Reform and Consumer Protection Act
|
ECTE
|
Empresa Catarinense de Transmissão de Energia S.A. (7.51 percent ownership interest at June 30, 2012, 2.5 and 14.99 percent ownership interests were sold in the fourth quarters of 2011 and 2010, respectively)
|
ENTE
|
Empresa Norte de Transmissão de Energia S.A. (entire 13.3 percent ownership interest sold in the fourth quarter of 2010)
|
EPA
|
U.S. Environmental Protection Agency
|
ERISA
|
Employee Retirement Income Security Act of 1974
|
ERTE
|
Empresa Regional de Transmissão de Energia S.A. (entire 13.3 percent ownership interest sold in the fourth quarter of 2010)
|
Exchange Act
|
Securities Exchange Act of 1934, as amended
|
FASB
|
Financial Accounting Standards Board
|
Fidelity
|
Fidelity Exploration & Production Company, a direct wholly owned subsidiary of WBI Holdings
|
FIP
|
Funding improvement plan
|
GAAP
|
Accounting principles generally accepted in the United States of America
|
GHG
|
Greenhouse gas
|
Great Plains
|
Great Plains Natural Gas Co., a public utility division of the Company
|
IFRS
|
International Financial Reporting Standards
|
Intermountain
|
Intermountain Gas Company, an indirect wholly owned subsidiary of MDU Energy Capital
|
JTL
|
JTL Group, Inc., an indirect wholly owned subsidiary of Knife River
|
Knife River
|
Knife River Corporation, a direct wholly owned subsidiary of Centennial
|
Knife River
-
Northwest
|
Knife River Corporation - Northwest, an indirect wholly owned subsidiary of Knife River
|
kWh
|
Kilowatt-hour
|
LPP
|
Lea Power Partners, LLC, a former indirect wholly owned subsidiary of Centennial Resources (member interests were sold in October 2006)
|
LWG
|
Lower Willamette Group
|
MBbls
|
Thousands of barrels
|
MBOE
|
Thousands of BOE
|
Mcf
|
Thousand cubic feet
|
MDU Brasil
|
MDU Brasil Ltda., an indirect wholly owned subsidiary of Centennial Resources
|
MDU Construction Services
|
MDU Construction Services Group, Inc., a direct wholly owned subsidiary of Centennial
|
MDU Energy Capital
|
MDU Energy Capital, LLC, a direct wholly owned subsidiary of the Company
|
MMBtu
|
Million Btu
|
MMcf
|
Million cubic feet
|
MMdk
|
Million decatherms
|
MNDOC
|
Minnesota Department of Commerce
|
MNPUC
|
Minnesota Public Utilities Commission
|
Montana-Dakota
|
Montana-Dakota Utilities Co., a public utility division of the Company
|
Montana DEQ
|
Montana Department of Environmental Quality
|
Montana First Judicial District Court
|
Montana First Judicial District Court, Lewis and Clark County
|
Montana Seventeenth Judicial District Court
|
Montana Seventeenth Judicial District Court, Phillips County
|
MPPAA
|
Multiemployer Pension Plan Amendments Act of 1980
|
NDPSC
|
North Dakota Public Service Commission
|
New York Supreme Court
|
Supreme Court of the State of New York, County of New York
|
NSPS
|
New Source Performance Standards
|
Oil
|
Includes crude oil, condensate and natural gas liquids
|
Omimex
|
Omimex Canada, Ltd.
|
OPUC
|
Oregon Public Utility Commission
|
Oregon DEQ
|
Oregon State Department of Environmental Quality
|
Prairielands
|
Prairielands Energy Marketing, Inc., an indirect wholly owned subsidiary of WBI Holdings
|
PRP
|
Potentially Responsible Party
|
RCRA
|
Resource Conservation and Recovery Act
|
ROD
|
Record of Decision
|
RP
|
Rehabilitation plan
|
SEC
|
U.S. Securities and Exchange Commission
|
SEC Defined Prices
|
The average price of oil and natural gas during the applicable 12-month period, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions
|
Securities Act
|
Securities Act of 1933, as amended
|
SourceGas
|
SourceGas Distribution LLC
|
WBI Energy Midstream
|
WBI Energy Midstream, LLC an indirect wholly owned subsidiary of WBI Holdings (previously Bitter Creek Pipelines, LLC, name changed effective July 1, 2012)
|
WBI Energy Transmission
|
WBI Energy Transmission, Inc., an indirect wholly owned subsidiary of WBI Holdings (previously Williston Basin Interstate Pipeline Company, name changed effective July 1, 2012)
|
WBI Holdings
|
WBI Holdings, Inc., a direct wholly owned subsidiary of Centennial
|
WUTC
|
Washington Utilities and Transportation Commission
|
Part I -- Financial Information
|
Page
|
|
|
Consolidated Statements of Income --
Three and Six Months Ended June 30, 2012 and 2011
|
|
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Consolidated Statements of Comprehensive Income --
Three and Six Months Ended June 30, 2012 and 2011
|
|
|
|
Consolidated Balance Sheets --
June 30, 2012 and 2011, and December 31, 2011
|
|
|
|
Consolidated Statements of Cash Flows --
Six Months Ended June 30, 2012 and 2011
|
|
|
|
Notes to Consolidated Financial Statements
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|
|
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
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|
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Quantitative and Qualitative Disclosures About Market Risk
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Controls and Procedures
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Part II -- Other Information
|
|
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|
Legal Proceedings
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Risk Factors
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|
|
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Unregistered Sales of Equity Securities and Use of Proceeds
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|
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Mine Safety Disclosures
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Exhibits
|
|
|
|
Signatures
|
|
|
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Exhibit Index
|
|
|
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Exhibits
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||
|
(In thousands, except per share amounts)
|
|||||||||||
Operating revenues:
|
|
|
|
|
||||||||
Electric, natural gas distribution and pipeline and energy services
|
$
|
204,455
|
|
$
|
274,538
|
|
$
|
599,533
|
|
$
|
752,018
|
|
Exploration and production, construction materials and contracting, construction services and other
|
763,507
|
|
656,219
|
|
1,221,236
|
|
1,080,544
|
|
||||
Total operating revenues
|
967,962
|
|
930,757
|
|
1,820,769
|
|
1,832,562
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||
Fuel and purchased power
|
15,193
|
|
14,474
|
|
33,613
|
|
31,428
|
|
||||
Purchased natural gas sold
|
58,411
|
|
101,538
|
|
243,839
|
|
346,224
|
|
||||
Operation and maintenance:
|
|
|
|
|
|
|
|
|
||||
Electric, natural gas distribution and pipeline and energy services
|
52,717
|
|
70,028
|
|
121,115
|
|
137,989
|
|
||||
Exploration and production, construction materials and contracting, construction services and other
|
623,347
|
|
536,608
|
|
999,497
|
|
896,408
|
|
||||
Depreciation, depletion and amortization
|
83,627
|
|
83,290
|
|
169,007
|
|
167,964
|
|
||||
Taxes, other than income
|
42,953
|
|
42,516
|
|
90,928
|
|
92,181
|
|
||||
Total operating expenses
|
876,248
|
|
848,454
|
|
1,657,999
|
|
1,672,194
|
|
||||
Operating income
|
91,714
|
|
82,303
|
|
162,770
|
|
160,368
|
|
||||
Earnings from equity method investments
|
385
|
|
949
|
|
1,637
|
|
1,433
|
|
||||
Other income
|
1,249
|
|
1,908
|
|
2,349
|
|
3,809
|
|
||||
Interest expense
|
17,650
|
|
20,036
|
|
37,089
|
|
42,053
|
|
||||
Income before income taxes
|
75,698
|
|
65,124
|
|
129,667
|
|
123,557
|
|
||||
Income taxes
|
26,691
|
|
19,889
|
|
44,769
|
|
35,793
|
|
||||
Income from continuing operations
|
49,007
|
|
45,235
|
|
84,898
|
|
87,764
|
|
||||
Income (loss) from discontinued operations, net of tax (Note 8)
|
5,106
|
|
(168
|
)
|
5,006
|
|
280
|
|
||||
Net income
|
54,113
|
|
45,067
|
|
89,904
|
|
88,044
|
|
||||
Dividends declared on preferred stocks
|
171
|
|
171
|
|
343
|
|
342
|
|
||||
Earnings on common stock
|
$
|
53,942
|
|
$
|
44,896
|
|
$
|
89,561
|
|
$
|
87,702
|
|
|
|
|
|
|
||||||||
Earnings per common share - basic:
|
|
|
|
|
|
|
|
|
||||
Earnings before discontinued operations
|
$
|
.26
|
|
$
|
.24
|
|
$
|
.45
|
|
$
|
.46
|
|
Discontinued operations, net of tax
|
.03
|
|
—
|
|
.02
|
|
—
|
|
||||
Earnings per common share - basic
|
$
|
.29
|
|
$
|
.24
|
|
$
|
.47
|
|
$
|
.46
|
|
|
|
|
|
|
||||||||
Earnings per common share - diluted:
|
|
|
|
|
|
|
|
|
||||
Earnings before discontinued operations
|
$
|
.26
|
|
$
|
.24
|
|
$
|
.45
|
|
$
|
.46
|
|
Discontinued operations, net of tax
|
.03
|
|
—
|
|
.02
|
|
—
|
|
||||
Earnings per common share - diluted
|
$
|
.29
|
|
$
|
.24
|
|
$
|
.47
|
|
$
|
.46
|
|
|
|
|
|
|
||||||||
Dividends declared per common share
|
$
|
.1675
|
|
$
|
.1625
|
|
$
|
.3350
|
|
$
|
.3250
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding - basic
|
188,831
|
|
188,794
|
|
188,821
|
|
188,732
|
|
||||
|
|
|
|
|
||||||||
Weighted average common shares outstanding - diluted
|
189,107
|
|
188,968
|
|
189,096
|
|
188,903
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||
|
(In thousands)
|
|||||||||||
Net income
|
$
|
54,113
|
|
$
|
45,067
|
|
$
|
89,904
|
|
$
|
88,044
|
|
Other comprehensive income (loss):
|
|
|
|
|
||||||||
Net unrealized gain (loss) on derivative instruments qualifying as hedges:
|
|
|
|
|
||||||||
Net unrealized gain (loss) on derivative instruments arising during the period, net of tax of $15,059 and $10,576 for the three months ended and $13,129 and $(388) for the six months ended in 2012 and 2011, respectively
|
25,773
|
|
17,057
|
|
22,506
|
|
(1,217
|
)
|
||||
Less: Reclassification adjustment for gain (loss) on derivative instruments included in net income, net of tax of $1,077 and $(2,191) for the three months ended and $2,738 and $91 for the six months ended in 2012 and 2011, respectively
|
1,834
|
|
(3,650
|
)
|
4,666
|
|
155
|
|
||||
Net unrealized gain (loss) on derivative instruments qualifying as hedges
|
23,939
|
|
20,707
|
|
17,840
|
|
(1,372
|
)
|
||||
Foreign currency translation adjustment, net of tax of $(402) and $32 for the three months ended and $(265) and $170 for the six months ended in 2012 and 2011, respectively
|
(579
|
)
|
50
|
|
(435
|
)
|
262
|
|
||||
Net unrealized gain (loss) on available-for-sale investments, net of tax of $(3) and $47 for the three months ended and $11 and $55 for the six months ended in 2012 and 2011, respectively
|
(5
|
)
|
87
|
|
21
|
|
103
|
|
||||
Other comprehensive income (loss)
|
23,355
|
|
20,844
|
|
17,426
|
|
(1,007
|
)
|
||||
Comprehensive income
|
$
|
77,468
|
|
$
|
65,911
|
|
$
|
107,330
|
|
$
|
87,037
|
|
|
June 30, 2012
|
June 30, 2011
|
December 31, 2011
|
||||||
(In thousands, except shares and per share amounts)
|
|
||||||||
ASSETS
|
|
|
|
||||||
Current assets:
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
101,643
|
|
$
|
107,768
|
|
$
|
162,772
|
|
Receivables, net
|
654,609
|
|
566,366
|
|
646,251
|
|
|||
Inventories
|
333,392
|
|
277,327
|
|
274,205
|
|
|||
Deferred income taxes
|
21,451
|
|
33,732
|
|
40,407
|
|
|||
Commodity derivative instruments
|
37,000
|
|
14,234
|
|
27,687
|
|
|||
Prepayments and other current assets
|
85,729
|
|
71,604
|
|
43,316
|
|
|||
Total current assets
|
1,233,824
|
|
1,071,031
|
|
1,194,638
|
|
|||
Investments
|
99,343
|
|
116,368
|
|
109,424
|
|
|||
Property, plant and equipment
|
8,068,177
|
|
7,394,616
|
|
7,646,222
|
|
|||
Less accumulated depreciation, depletion and amortization
|
3,478,118
|
|
3,236,417
|
|
3,361,208
|
|
|||
Net property, plant and equipment
|
4,590,059
|
|
4,158,199
|
|
4,285,014
|
|
|||
Deferred charges and other assets:
|
|
|
|
|
|
|
|||
Goodwill
|
635,389
|
|
634,931
|
|
634,931
|
|
|||
Other intangible assets, net
|
18,656
|
|
23,337
|
|
20,843
|
|
|||
Other
|
324,299
|
|
253,515
|
|
311,275
|
|
|||
Total deferred charges and other assets
|
978,344
|
|
911,783
|
|
967,049
|
|
|||
Total assets
|
$
|
6,901,570
|
|
$
|
6,257,381
|
|
$
|
6,556,125
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|
|
|||
Long-term debt due within one year
|
$
|
282,199
|
|
$
|
62,571
|
|
$
|
139,267
|
|
Accounts payable
|
379,840
|
|
304,049
|
|
337,228
|
|
|||
Taxes payable
|
46,919
|
|
45,065
|
|
70,176
|
|
|||
Dividends payable
|
31,800
|
|
30,850
|
|
31,794
|
|
|||
Accrued compensation
|
37,774
|
|
37,978
|
|
47,804
|
|
|||
Commodity derivative instruments
|
1,037
|
|
18,686
|
|
13,164
|
|
|||
Other accrued liabilities
|
244,922
|
|
224,220
|
|
259,320
|
|
|||
Total current liabilities
|
1,024,491
|
|
723,419
|
|
898,753
|
|
|||
Long-term debt
|
1,383,432
|
|
1,369,534
|
|
1,285,411
|
|
|||
Deferred credits and other liabilities:
|
|
|
|
|
|
|
|||
Deferred income taxes
|
839,683
|
|
727,562
|
|
769,166
|
|
|||
Other liabilities
|
833,692
|
|
711,516
|
|
827,228
|
|
|||
Total deferred credits and other liabilities
|
1,673,375
|
|
1,439,078
|
|
1,596,394
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
|
|||
Stockholders' equity
:
|
|
|
|
|
|
|
|||
Preferred stocks
|
15,000
|
|
15,000
|
|
15,000
|
|
|||
Common stockholders' equity:
|
|
|
|
|
|
|
|||
Common stock
|
|
|
|
|
|
|
|||
Authorized - 500,000,000 shares, $1.00 par value
|
|
|
|
||||||
Shares issued - 189,369,450 at June 30, 2012, 189,332,485 at
June 30, 2011 and 189,332,485 at December 31, 2011
|
189,369
|
|
189,332
|
|
189,332
|
|
|||
Other paid-in capital
|
1,036,935
|
|
1,033,366
|
|
1,035,739
|
|
|||
Retained earnings
|
1,612,169
|
|
1,523,546
|
|
1,586,123
|
|
|||
Accumulated other comprehensive loss
|
(29,575
|
)
|
(32,268
|
)
|
(47,001
|
)
|
|||
Treasury stock at cost - 538,921 shares
|
(3,626
|
)
|
(3,626
|
)
|
(3,626
|
)
|
|||
Total common stockholders' equity
|
2,805,272
|
|
2,710,350
|
|
2,760,567
|
|
|||
Total stockholders' equity
|
2,820,272
|
|
2,725,350
|
|
2,775,567
|
|
|||
Total liabilities and stockholders' equity
|
$
|
6,901,570
|
|
$
|
6,257,381
|
|
$
|
6,556,125
|
|
|
Six Months Ended
|
|||||
|
June 30,
|
|||||
|
2012
|
2011
|
||||
|
(In thousands)
|
|||||
Operating activities:
|
|
|
||||
Net income
|
$
|
89,904
|
|
$
|
88,044
|
|
Income from discontinued operations, net of tax
|
5,006
|
|
280
|
|
||
Income from continuing operations
|
84,898
|
|
87,764
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||
Depreciation, depletion and amortization
|
169,007
|
|
167,964
|
|
||
Earnings, net of distributions, from equity method investments
|
1,251
|
|
512
|
|
||
Deferred income taxes
|
76,987
|
|
60,960
|
|
||
Changes in current assets and liabilities, net of acquisitions:
|
|
|
|
|
||
Receivables
|
(2,470
|
)
|
17,259
|
|
||
Inventories
|
(58,367
|
)
|
(29,154
|
)
|
||
Other current assets
|
(33,556
|
)
|
(19,600
|
)
|
||
Accounts payable
|
(7,119
|
)
|
(3,197
|
)
|
||
Other current liabilities
|
(45,562
|
)
|
(9,753
|
)
|
||
Other noncurrent changes
|
(10,070
|
)
|
(17,969
|
)
|
||
Net cash provided by continuing operations
|
174,999
|
|
254,786
|
|
||
Net cash used in discontinued operations
|
(258
|
)
|
(491
|
)
|
||
Net cash provided by operating activities
|
174,741
|
|
254,295
|
|
||
|
|
|
||||
Investing activities:
|
|
|
|
|
||
Capital expenditures
|
(388,449
|
)
|
(224,934
|
)
|
||
Acquisitions, net of cash acquired
|
(65,767
|
)
|
(157
|
)
|
||
Net proceeds from sale or disposition of property and other
|
29,454
|
|
16,145
|
|
||
Investments
|
11,172
|
|
(9,955
|
)
|
||
Net cash used in continuing operations
|
(413,590
|
)
|
(218,901
|
)
|
||
Net cash provided by discontinued operations
|
—
|
|
—
|
|
||
Net cash used in investing activities
|
(413,590
|
)
|
(218,901
|
)
|
||
|
|
|
||||
Financing activities:
|
|
|
|
|
||
Repayment of short-term borrowings
|
—
|
|
(20,000
|
)
|
||
Issuance of long-term debt
|
299,945
|
|
6,000
|
|
||
Repayment of long-term debt
|
(58,605
|
)
|
(81,202
|
)
|
||
Proceeds from issuance of common stock
|
88
|
|
5,744
|
|
||
Dividends paid
|
(63,594
|
)
|
(61,623
|
)
|
||
Excess tax benefit on stock-based compensation
|
26
|
|
1,248
|
|
||
Net cash provided by (used in) continuing operations
|
177,860
|
|
(149,833
|
)
|
||
Net cash provided by discontinued operations
|
—
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
177,860
|
|
(149,833
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(140
|
)
|
133
|
|
||
Decrease in cash and cash equivalents
|
(61,129
|
)
|
(114,306
|
)
|
||
Cash and cash equivalents -- beginning of year
|
162,772
|
|
222,074
|
|
||
Cash and cash equivalents -- end of period
|
$
|
101,643
|
|
$
|
107,768
|
|
|
June 30,
2012 |
June 30,
2011 |
December 31,
2011 |
||||||
|
(In thousands)
|
||||||||
Aggregates held for resale
|
$
|
90,992
|
|
$
|
82,936
|
|
$
|
78,518
|
|
Asphalt oil
|
81,915
|
|
55,729
|
|
32,335
|
|
|||
Materials and supplies
|
72,321
|
|
65,363
|
|
61,611
|
|
|||
Merchandise for resale
|
30,417
|
|
33,435
|
|
32,165
|
|
|||
Natural gas in storage (current)
|
26,216
|
|
11,993
|
|
36,578
|
|
|||
Other
|
31,531
|
|
27,871
|
|
32,998
|
|
|||
Total
|
$
|
333,392
|
|
$
|
277,327
|
|
$
|
274,205
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||
|
June 30,
|
June 30,
|
||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
(In thousands)
|
|||||||
Weighted average common shares outstanding - basic
|
188,831
|
|
188,794
|
|
188,821
|
|
188,732
|
|
Effect of dilutive stock options and performance share awards
|
276
|
|
174
|
|
275
|
|
171
|
|
Weighted average common shares outstanding - diluted
|
189,107
|
|
188,968
|
|
189,096
|
|
188,903
|
|
Shares excluded from the calculation of diluted earnings per share
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Six Months Ended
|
|||||
|
June 30,
|
|||||
|
2012
|
|
2011
|
|
||
|
(In thousands)
|
|||||
Interest, net of amount capitalized
|
$
|
35,893
|
|
$
|
40,646
|
|
Income taxes, net
|
$
|
2,418
|
|
$
|
12,887
|
|
|
June 30,
|
|||||
|
2012
|
|
2011
|
|
||
|
(In thousands)
|
|||||
Property, plant and equipment additions in accounts payable
|
$
|
76,505
|
|
$
|
24,991
|
|
Six Months Ended
June 30, 2012 |
Balance
as of
January 1,
2012*
|
Goodwill
Acquired During
the Year**
|
Balance
as of June 30, 2012* |
||||||
|
(In thousands)
|
||||||||
Natural gas distribution
|
$
|
345,736
|
|
$
|
—
|
|
$
|
345,736
|
|
Pipeline and energy services
|
9,737
|
|
—
|
|
9,737
|
|
|||
Construction materials and contracting
|
176,290
|
|
—
|
|
176,290
|
|
|||
Construction services
|
103,168
|
|
458
|
|
103,626
|
|
|||
Total
|
$
|
634,931
|
|
$
|
458
|
|
$
|
635,389
|
|
Six Months Ended
June 30, 2011 |
Balance
as of
January 1,
2011*
|
Goodwill
Acquired
During the
Year**
|
Balance
as of June 30, 2011* |
||||||
|
(In thousands)
|
||||||||
Natural gas distribution
|
$
|
345,736
|
|
$
|
—
|
|
$
|
345,736
|
|
Pipeline and energy services
|
9,737
|
|
—
|
|
9,737
|
|
|||
Construction materials and contracting
|
176,290
|
|
—
|
|
176,290
|
|
|||
Construction services
|
102,870
|
|
298
|
|
103,168
|
|
|||
Total
|
$
|
634,633
|
|
$
|
298
|
|
$
|
634,931
|
|
Year Ended
December 31, 2011
|
Balance
as of
January 1,
2011*
|
Goodwill
Acquired
During the
Year**
|
Balance
as of
December 31,
2011*
|
||||||
|
(In thousands)
|
||||||||
Natural gas distribution
|
$
|
345,736
|
|
$
|
—
|
|
$
|
345,736
|
|
Pipeline and energy services
|
9,737
|
|
—
|
|
9,737
|
|
|||
Construction materials and contracting
|
176,290
|
|
—
|
|
176,290
|
|
|||
Construction services
|
102,870
|
|
298
|
|
103,168
|
|
|||
Total
|
$
|
634,633
|
|
$
|
298
|
|
$
|
634,931
|
|
|
June 30,
2012 |
June 30,
2011 |
December 31,
2011 |
||||||
|
(In thousands)
|
||||||||
Customer relationships
|
$
|
21,010
|
|
$
|
21,702
|
|
$
|
21,702
|
|
Accumulated amortization
|
(10,690
|
)
|
(9,395
|
)
|
(10,392
|
)
|
|||
|
10,320
|
|
12,307
|
|
11,310
|
|
|||
Noncompete agreements
|
7,086
|
|
7,685
|
|
7,685
|
|
|||
Accumulated amortization
|
(5,057
|
)
|
(5,062
|
)
|
(5,371
|
)
|
|||
|
2,029
|
|
2,623
|
|
2,314
|
|
|||
Other
|
10,978
|
|
12,899
|
|
11,442
|
|
|||
Accumulated amortization
|
(4,671
|
)
|
(4,492
|
)
|
(4,223
|
)
|
|||
|
6,307
|
|
8,407
|
|
7,219
|
|
|||
Total
|
$
|
18,656
|
|
$
|
23,337
|
|
$
|
20,843
|
|
Asset
Derivatives
|
Location on
Consolidated
Balance Sheets
|
Fair Value at
June 30, 2012 |
Fair Value at
June 30, 2011 |
Fair Value at
December 31, 2011 |
||||||
|
|
(In thousands)
|
||||||||
Designated as hedges:
|
|
|
|
|||||||
Commodity derivatives
|
Commodity derivative instruments
|
$
|
36,360
|
|
$
|
14,040
|
|
$
|
27,687
|
|
|
Other assets - noncurrent
|
11,445
|
|
6,265
|
|
2,768
|
|
|||
|
|
47,805
|
|
20,305
|
|
30,455
|
|
|||
Not designated as hedges:
|
|
|
|
|
||||||
Commodity derivatives
|
Commodity derivative instruments
|
640
|
|
194
|
|
—
|
|
|||
|
Other assets - noncurrent
|
212
|
|
—
|
|
—
|
|
|||
|
|
852
|
|
194
|
|
—
|
|
|||
Total asset derivatives
|
|
$
|
48,657
|
|
$
|
20,499
|
|
$
|
30,455
|
|
Liability
Derivatives
|
Location on
Consolidated
Balance Sheets
|
Fair Value at
June 30, 2012 |
Fair Value at
June 30, 2011 |
Fair Value at
December 31, 2011 |
||||||
|
|
(In thousands)
|
||||||||
Designated as hedges:
|
|
|
|
|||||||
Commodity derivatives
|
Commodity derivative instruments
|
$
|
789
|
|
$
|
17,780
|
|
$
|
12,727
|
|
|
Other liabilities - noncurrent
|
—
|
|
6,735
|
|
937
|
|
|||
Interest rate derivatives
|
Other accrued liabilities
|
6,963
|
|
—
|
|
827
|
|
|||
|
Other liabilities - noncurrent
|
—
|
|
—
|
|
3,935
|
|
|||
|
|
7,752
|
|
24,515
|
|
18,426
|
|
|||
Not designated as hedges:
|
|
|
|
|
|
|
||||
Commodity derivatives
|
Commodity derivative instruments
|
248
|
|
906
|
|
437
|
|
|||
|
Other liabilities - noncurrent
|
—
|
|
—
|
|
—
|
|
|||
|
|
248
|
|
906
|
|
437
|
|
|||
Total liability derivatives
|
|
$
|
8,000
|
|
$
|
25,421
|
|
$
|
18,863
|
|
June 30, 2012
|
Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
||||||||
|
(In thousands)
|
|||||||||||
Insurance investment contract
|
$
|
37,250
|
|
$
|
8,709
|
|
$
|
—
|
|
$
|
45,959
|
|
Mortgage-backed securities
|
8,130
|
|
128
|
|
(5
|
)
|
8,253
|
|
||||
U.S. Treasury securities
|
1,958
|
|
37
|
|
(1
|
)
|
1,994
|
|
||||
Total
|
$
|
47,338
|
|
$
|
8,874
|
|
$
|
(6
|
)
|
$
|
56,206
|
|
December 31, 2011
|
Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
||||||||
|
(In thousands)
|
|||||||||||
Insurance investment contract
|
$
|
31,884
|
|
$
|
6,468
|
|
$
|
—
|
|
$
|
38,352
|
|
Auction rate securities
|
11,400
|
|
—
|
|
—
|
|
11,400
|
|
||||
Mortgage-backed securities
|
8,206
|
|
95
|
|
(5
|
)
|
8,296
|
|
||||
U.S. Treasury securities
|
1,619
|
|
37
|
|
—
|
|
1,656
|
|
||||
Total
|
$
|
53,109
|
|
$
|
6,600
|
|
$
|
(5
|
)
|
$
|
59,704
|
|
|
Fair Value Measurements at
June 30, 2012, Using |
|
||||||||||
|
Quoted Prices in
Active Markets
for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
Balance at
June 30, 2012 |
||||||||
|
(In thousands)
|
|||||||||||
Assets:
|
|
|
|
|
||||||||
Money market funds
|
$
|
—
|
|
$
|
21,054
|
|
$
|
—
|
|
$
|
21,054
|
|
Available-for-sale securities:
|
|
|
|
|
||||||||
Insurance investment contract*
|
—
|
|
45,959
|
|
—
|
|
45,959
|
|
||||
Mortgage-backed securities
|
—
|
|
8,253
|
|
—
|
|
8,253
|
|
||||
U.S. Treasury securities
|
—
|
|
1,994
|
|
—
|
|
1,994
|
|
||||
Commodity derivative instruments
|
—
|
|
48,657
|
|
—
|
|
48,657
|
|
||||
Total assets measured at fair value
|
$
|
—
|
|
$
|
125,917
|
|
$
|
—
|
|
$
|
125,917
|
|
Liabilities:
|
|
|
|
|
||||||||
Commodity derivative instruments
|
$
|
—
|
|
$
|
1,037
|
|
$
|
—
|
|
$
|
1,037
|
|
Interest rate derivative instruments
|
—
|
|
6,963
|
|
—
|
|
6,963
|
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
$
|
8,000
|
|
$
|
—
|
|
$
|
8,000
|
|
|
Fair Value Measurements at
June 30, 2011, Using |
|
||||||||||
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
Balance at
June 30, 2011 |
||||||||
|
(In thousands)
|
|||||||||||
Assets:
|
|
|
|
|
||||||||
Money market funds
|
$
|
—
|
|
$
|
8,297
|
|
$
|
—
|
|
$
|
8,297
|
|
Available-for-sale securities:
|
|
|
|
|
||||||||
Insurance investment contract*
|
—
|
|
40,328
|
|
—
|
|
40,328
|
|
||||
Auction rate securities
|
—
|
|
11,400
|
|
—
|
|
11,400
|
|
||||
Mortgage-backed securities
|
—
|
|
8,162
|
|
—
|
|
8,162
|
|
||||
U.S. Treasury securities
|
—
|
|
1,969
|
|
—
|
|
1,969
|
|
||||
Commodity derivative instruments
|
—
|
|
20,499
|
|
—
|
|
20,499
|
|
||||
Total assets measured at fair value
|
$
|
—
|
|
$
|
90,655
|
|
$
|
—
|
|
$
|
90,655
|
|
Liabilities:
|
|
|
|
|
||||||||
Commodity derivative instruments
|
$
|
—
|
|
$
|
25,421
|
|
$
|
—
|
|
$
|
25,421
|
|
Total liabilities measured at fair value
|
$
|
—
|
|
$
|
25,421
|
|
$
|
—
|
|
$
|
25,421
|
|
|
Fair Value Measurements at
December 31, 2011, Using |
|
||||||||||
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Balance at
December 31, 2011 |
||||||||
|
(In thousands)
|
|||||||||||
Assets:
|
|
|
|
|
||||||||
Money market funds
|
$
|
—
|
|
$
|
97,500
|
|
$
|
—
|
|
$
|
97,500
|
|
Available-for-sale securities:
|
|
|
|
|
||||||||
Insurance investment contract*
|
—
|
|
38,352
|
|
—
|
|
38,352
|
|
||||
Auction rate securities
|
—
|
|
11,400
|
|
—
|
|
11,400
|
|
||||
Mortgage-backed securities
|
—
|
|
8,296
|
|
—
|
|
8,296
|
|
||||
U.S. Treasury securities
|
—
|
|
1,656
|
|
—
|
|
1,656
|
|
||||
Commodity derivative instruments
|
—
|
|
30,455
|
|
—
|
|
30,455
|
|
||||
Total assets measured at fair value
|
$
|
—
|
|
$
|
187,659
|
|
$
|
—
|
|
$
|
187,659
|
|
Liabilities:
|
|
|
|
|
||||||||
Commodity derivative instruments
|
$
|
—
|
|
$
|
14,101
|
|
$
|
—
|
|
$
|
14,101
|
|
Interest rate derivative instruments
|
—
|
|
4,762
|
|
—
|
|
4,762
|
|
||||
Total liabilities measured at fair value
|
$
|
—
|
|
$
|
18,863
|
|
$
|
—
|
|
$
|
18,863
|
|
|
Carrying
Amount
|
Fair
Value
|
||||
|
(In thousands)
|
|||||
Long-term debt at June 30, 2012
|
$
|
1,665,631
|
|
$
|
1,839,430
|
|
Long-term debt at June 30, 2011
|
$
|
1,432,105
|
|
$
|
1,550,592
|
|
Long-term debt at December 31, 2011
|
$
|
1,424,678
|
|
$
|
1,592,807
|
|
Three Months Ended
June 30, 2012 |
External
Operating
Revenues
|
Inter-
segment
Operating
Revenues
|
Earnings
on Common
Stock
|
||||||
|
(In thousands)
|
||||||||
Electric
|
$
|
52,955
|
|
$
|
—
|
|
$
|
4,419
|
|
Natural gas distribution
|
116,844
|
|
—
|
|
(6,411
|
)
|
|||
Pipeline and energy services
|
34,656
|
|
8,937
|
|
15,851
|
|
|||
|
204,455
|
|
8,937
|
|
13,859
|
|
|||
Exploration and production
|
100,232
|
|
5,711
|
|
17,957
|
|
|||
Construction materials and contracting
|
438,963
|
|
3,097
|
|
7,791
|
|
|||
Construction services
|
223,858
|
|
219
|
|
8,684
|
|
|||
Other
|
454
|
|
2,028
|
|
5,651
|
|
|||
|
763,507
|
|
11,055
|
|
40,083
|
|
|||
Intersegment eliminations
|
—
|
|
(19,992
|
)
|
—
|
|
|||
Total
|
$
|
967,962
|
|
$
|
—
|
|
$
|
53,942
|
|
Three Months Ended
June 30, 2011 |
External
Operating
Revenues
|
|
Inter-
segment
Operating
Revenues
|
|
Earnings
on Common
Stock
|
|
|||
|
(In thousands)
|
||||||||
Electric
|
$
|
49,986
|
|
$
|
—
|
|
$
|
4,807
|
|
Natural gas distribution
|
164,626
|
|
—
|
|
1,902
|
|
|||
Pipeline and energy services
|
59,926
|
|
12,504
|
|
4,772
|
|
|||
|
274,538
|
|
12,504
|
|
11,481
|
|
|||
Exploration and production
|
87,390
|
|
25,392
|
|
21,326
|
|
|||
Construction materials and contracting
|
375,613
|
|
—
|
|
4,980
|
|
|||
Construction services
|
192,697
|
|
5,379
|
|
6,138
|
|
|||
Other
|
519
|
|
2,301
|
|
971
|
|
|||
|
656,219
|
|
33,072
|
|
33,415
|
|
|||
Intersegment eliminations
|
—
|
|
(45,576
|
)
|
—
|
|
|||
Total
|
$
|
930,757
|
|
$
|
—
|
|
$
|
44,896
|
|
Six Months Ended
June 30, 2012 |
External
Operating
Revenues
|
|
Inter-
segment
Operating
Revenues
|
|
Earnings
on Common
Stock
|
|
|||
|
(In thousands)
|
||||||||
Electric
|
$
|
110,918
|
|
$
|
—
|
|
$
|
11,978
|
|
Natural gas distribution
|
424,733
|
|
—
|
|
19,097
|
|
|||
Pipeline and energy services
|
63,882
|
|
29,347
|
|
18,611
|
|
|||
|
599,533
|
|
29,347
|
|
49,686
|
|
|||
Exploration and production
|
188,727
|
|
17,038
|
|
30,887
|
|
|||
Construction materials and contracting
|
588,232
|
|
3,248
|
|
(17,141
|
)
|
|||
Construction services
|
442,010
|
|
244
|
|
20,087
|
|
|||
Other
|
2,267
|
|
2,355
|
|
6,042
|
|
|||
|
1,221,236
|
|
22,885
|
|
39,875
|
|
|||
Intersegment eliminations
|
—
|
|
(52,232
|
)
|
—
|
|
|||
Total
|
$
|
1,820,769
|
|
$
|
—
|
|
$
|
89,561
|
|
Six Months Ended
June 30, 2011 |
External
Operating
Revenues
|
|
Inter-
segment
Operating
Revenues
|
|
Earnings
on Common
Stock
|
|
|||
|
(In thousands)
|
||||||||
Electric
|
$
|
107,831
|
|
$
|
—
|
|
$
|
13,331
|
|
Natural gas distribution
|
535,010
|
|
—
|
|
29,418
|
|
|||
Pipeline and energy services
|
109,177
|
|
37,245
|
|
11,691
|
|
|||
|
752,018
|
|
37,245
|
|
54,440
|
|
|||
Exploration and production
|
165,801
|
|
50,933
|
|
37,596
|
|
|||
Construction materials and contracting
|
519,146
|
|
—
|
|
(16,423
|
)
|
|||
Construction services
|
394,877
|
|
6,596
|
|
10,771
|
|
|||
Other
|
720
|
|
4,589
|
|
1,318
|
|
|||
|
1,080,544
|
|
62,118
|
|
33,262
|
|
|||
Intersegment eliminations
|
—
|
|
(99,363
|
)
|
—
|
|
|||
Total
|
$
|
1,832,562
|
|
$
|
—
|
|
$
|
87,702
|
|
|
|
|
Other
|
|||||||||
|
|
|
Postretirement
|
|||||||||
|
Pension Benefits
|
Benefits
|
||||||||||
Three Months Ended June 30,
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
||||
|
(In thousands)
|
|||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
||||||||
Service cost
|
$
|
350
|
|
$
|
827
|
|
$
|
461
|
|
$
|
383
|
|
Interest cost
|
4,262
|
|
4,959
|
|
1,038
|
|
1,161
|
|
||||
Expected return on assets
|
(5,845
|
)
|
(5,727
|
)
|
(1,201
|
)
|
(1,308
|
)
|
||||
Amortization of prior service cost (credit)
|
(21
|
)
|
44
|
|
(272
|
)
|
(669
|
)
|
||||
Amortization of net actuarial (gain) loss
|
2,102
|
|
1,049
|
|
887
|
|
(53
|
)
|
||||
Amortization of net transition obligation
|
—
|
|
—
|
|
531
|
|
531
|
|
||||
Curtailment loss
|
—
|
|
1,218
|
|
—
|
|
—
|
|
||||
Net periodic benefit cost, including amount capitalized
|
848
|
|
2,370
|
|
1,444
|
|
45
|
|
||||
Less amount capitalized
|
196
|
|
287
|
|
183
|
|
(28
|
)
|
||||
Net periodic benefit cost
|
$
|
652
|
|
$
|
2,083
|
|
$
|
1,261
|
|
$
|
73
|
|
|
|
|
|
|
||||||||
|
|
|
Other
|
|||||||||
|
|
|
Postretirement
|
|||||||||
|
Pension Benefits
|
Benefits
|
||||||||||
Six Months Ended June 30,
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
||||
|
(In thousands)
|
|||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
||||||||
Service cost
|
$
|
695
|
|
$
|
1,654
|
|
$
|
873
|
|
$
|
722
|
|
Interest cost
|
8,816
|
|
9,919
|
|
2,181
|
|
2,350
|
|
||||
Expected return on assets
|
(11,731
|
)
|
(11,427
|
)
|
(2,445
|
)
|
(2,526
|
)
|
||||
Amortization of prior service cost (credit)
|
(42
|
)
|
87
|
|
(544
|
)
|
(1,338
|
)
|
||||
Amortization of net actuarial loss
|
3,783
|
|
2,592
|
|
1,413
|
|
258
|
|
||||
Amortization of net transition obligation
|
—
|
|
—
|
|
1,063
|
|
1,062
|
|
||||
Curtailment loss
|
—
|
|
1,218
|
|
—
|
|
—
|
|
||||
Net periodic benefit cost, including amount capitalized
|
1,521
|
|
4,043
|
|
2,541
|
|
528
|
|
||||
Less amount capitalized
|
430
|
|
535
|
|
321
|
|
(95
|
)
|
||||
Net periodic benefit cost
|
$
|
1,091
|
|
$
|
3,508
|
|
$
|
2,220
|
|
$
|
623
|
|
•
|
Organic growth as well as a continued disciplined approach to the acquisition of well-managed companies and properties
|
•
|
The elimination of system-wide cost redundancies through increased focus on integration of operations and standardization and consolidation of various support services and functions across companies within the organization
|
•
|
The development of projects that are accretive to earnings per share and return on invested capital
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
||||
|
(Dollars in millions, where applicable)
|
|||||||||||
Electric
|
$
|
4.4
|
|
$
|
4.8
|
|
$
|
12.0
|
|
$
|
13.3
|
|
Natural gas distribution
|
(6.4
|
)
|
1.9
|
|
19.1
|
|
29.4
|
|
||||
Pipeline and energy services
|
15.8
|
|
4.8
|
|
18.6
|
|
11.7
|
|
||||
Exploration and production
|
18.0
|
|
21.3
|
|
30.9
|
|
37.6
|
|
||||
Construction materials and contracting
|
7.8
|
|
5.0
|
|
(17.1
|
)
|
(16.4
|
)
|
||||
Construction services
|
8.7
|
|
6.1
|
|
20.1
|
|
10.8
|
|
||||
Other
|
.5
|
|
1.1
|
|
1.0
|
|
1.1
|
|
||||
Earnings before discontinued operations
|
48.8
|
|
45.0
|
|
84.6
|
|
87.5
|
|
||||
Income (loss) from discontinued operations, net of tax
|
5.1
|
|
(.1
|
)
|
5.0
|
|
.2
|
|
||||
Earnings on common stock
|
$
|
53.9
|
|
$
|
44.9
|
|
$
|
89.6
|
|
$
|
87.7
|
|
Earnings per common share - basic:
|
|
|
|
|
|
|
|
|
||||
Earnings before discontinued operations
|
$
|
.26
|
|
$
|
.24
|
|
$
|
.45
|
|
$
|
.46
|
|
Discontinued operations, net of tax
|
.03
|
|
—
|
|
.02
|
|
—
|
|
||||
Earnings per common share - basic
|
$
|
.29
|
|
$
|
.24
|
|
$
|
.47
|
|
$
|
.46
|
|
Earnings per common share - diluted:
|
|
|
|
|
|
|
|
|
||||
Earnings before discontinued operations
|
$
|
.26
|
|
$
|
.24
|
|
$
|
.45
|
|
$
|
.46
|
|
Discontinued operations, net of tax
|
.03
|
|
—
|
|
.02
|
|
—
|
|
||||
Earnings per common share - diluted
|
$
|
.29
|
|
$
|
.24
|
|
$
|
.47
|
|
$
|
.46
|
|
Return on average common equity for the 12 months ended
|
|
|
|
|
7.7
|
%
|
8.9
|
%
|
•
|
A net benefit related to the natural gas gathering operations litigation of $15.0 million (after tax), as discussed in Note 18, at the pipeline and energy services business
|
•
|
Income from discontinued operations of $5.1 million (after tax), as discussed in Note 8
|
•
|
Higher workloads and margins in the Central and Western regions, higher equipment sales and rental margins, as well as higher margins in the Mountain region, partially offset by higher general and administrative expense at the construction services business
|
•
|
Lower operation and maintenance expense, as previously discussed, partially offset by lower gathering volumes and lower storage services revenue at the pipeline and energy services business
|
•
|
Income from discontinued operations of $5.0 million (after tax), as previously discussed
|
•
|
Decreased retail sales volumes, higher operation and maintenance expense, as well as higher income taxes at the natural gas distribution business
|
•
|
Lower average realized natural gas prices, decreased natural gas production and higher depreciation, depletion and amortization expense, partially offset by increased oil production, lower gathering and transportation expense and lower production taxes at the exploration and production business
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
||||
|
(Dollars in millions, where applicable)
|
|||||||||||
Operating revenues
|
$
|
53.0
|
|
$
|
50.0
|
|
$
|
110.9
|
|
$
|
107.8
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Fuel and purchased power
|
15.2
|
|
14.5
|
|
33.6
|
|
31.4
|
|
||||
Operation and maintenance
|
19.1
|
|
18.3
|
|
35.3
|
|
34.3
|
|
||||
Depreciation, depletion and amortization
|
8.0
|
|
7.9
|
|
16.1
|
|
16.1
|
|
||||
Taxes, other than income
|
2.6
|
|
2.5
|
|
5.3
|
|
5.0
|
|
||||
|
44.9
|
|
43.2
|
|
90.3
|
|
86.8
|
|
||||
Operating income
|
8.1
|
|
6.8
|
|
20.6
|
|
21.0
|
|
||||
Earnings
|
$
|
4.4
|
|
$
|
4.8
|
|
$
|
12.0
|
|
$
|
13.3
|
|
Retail sales (million kWh)
|
666.3
|
|
614.6
|
|
1,436.0
|
|
1,409.3
|
|
||||
Sales for resale (million kWh)
|
1.0
|
|
21.8
|
|
2.9
|
|
28.5
|
|
||||
Average cost of fuel and purchased power per kWh
|
$
|
.021
|
|
$
|
.021
|
|
$
|
.022
|
|
$
|
.021
|
|
•
|
Higher income taxes of $1.3 million, primarily related to the absence of the reduction of deferred income taxes associated with benefits in 2011
|
•
|
Higher operation and maintenance expense of $600,000 (after tax), including increased contract services at certain of the Company's electric generation stations
|
•
|
Higher income taxes of $1.8 million, primarily related to the absence of the reduction of deferred income taxes as previously discussed, as well as the absence of an income tax benefit related to favorable resolution of certain income tax matters in 2011
|
•
|
Higher operation and maintenance expense of $600,000 (after tax), as previously discussed
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
||||
|
(Dollars in millions, where applicable)
|
|||||||||||
Operating revenues
|
$
|
116.8
|
|
$
|
164.6
|
|
$
|
424.7
|
|
$
|
535.0
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||
Purchased natural gas sold
|
62.9
|
|
102.0
|
|
262.2
|
|
359.4
|
|
||||
Operation and maintenance
|
35.9
|
|
33.3
|
|
71.1
|
|
67.6
|
|
||||
Depreciation, depletion and amortization
|
11.3
|
|
11.2
|
|
22.5
|
|
22.4
|
|
||||
Taxes, other than income
|
10.0
|
|
10.6
|
|
26.2
|
|
28.4
|
|
||||
|
120.1
|
|
157.1
|
|
382.0
|
|
477.8
|
|
||||
Operating income (loss)
|
(3.3
|
)
|
7.5
|
|
42.7
|
|
57.2
|
|
||||
Earnings (loss)
|
$
|
(6.4
|
)
|
$
|
1.9
|
|
$
|
19.1
|
|
$
|
29.4
|
|
Volumes (MMdk):
|
|
|
|
|
|
|
||||||
Sales
|
13.4
|
|
17.3
|
|
52.1
|
|
61.3
|
|
||||
Transportation
|
26.8
|
|
25.6
|
|
64.7
|
|
59.7
|
|
||||
Total throughput
|
40.2
|
|
42.9
|
|
116.8
|
|
121.0
|
|
||||
Degree days (% of normal)*
|
|
|
|
|
|
|
|
|
||||
Montana-Dakota
|
77
|
%
|
120
|
%
|
77
|
%
|
112
|
%
|
||||
Cascade
|
94
|
%
|
118
|
%
|
99
|
%
|
107
|
%
|
||||
Intermountain
|
97
|
%
|
141
|
%
|
94
|
%
|
113
|
%
|
||||
Average cost of natural gas, including transportation, per dk
|
$
|
4.70
|
|
$
|
5.88
|
|
$
|
5.03
|
|
$
|
5.87
|
|
* Degree days are a measure of the daily temperature-related demand for energy for heating.
|
•
|
Lower earnings of $4.4 million (after tax) related to decreased retail sales volumes, largely resulting from significantly warmer weather than last year
|
•
|
Higher operation and maintenance expense of $1.9 million (after tax), including higher benefit and payroll-related costs
|
•
|
Higher income taxes of $1.5 million, primarily related to the absence of a reduction of deferred income taxes associated with benefits in 2011
|
•
|
Lower earnings of $7.0 million (after tax) related to decreased retail sales volumes, largely resulting from significantly warmer weather than last year, partially offset by weather normalization adjustments in certain jurisdictions
|
•
|
Higher operation and maintenance expense of $1.9 million (after tax), as previously discussed
|
•
|
Higher income taxes of $1.6 million, as previously discussed
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
June 30,
|
June 30,
|
||||||||||||
|
2012
|
|
|
2011
|
|
2012
|
|
|
2011
|
|
||||
|
(Dollars in millions)
|
|||||||||||||
Operating revenues
|
$
|
43.6
|
|
|
$
|
72.4
|
|
$
|
93.2
|
|
|
$
|
146.4
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||
Purchased natural gas sold
|
8.5
|
|
|
33.9
|
|
24.6
|
|
|
68.0
|
|
||||
Operation and maintenance
|
(1.4
|
)
|
*
|
18.6
|
|
15.6
|
|
*
|
36.2
|
|
||||
Depreciation, depletion and amortization
|
6.8
|
|
|
6.4
|
|
13.1
|
|
|
12.8
|
|
||||
Taxes, other than income
|
3.5
|
|
|
3.4
|
|
6.9
|
|
|
7.0
|
|
||||
|
17.4
|
|
|
62.3
|
|
60.2
|
|
|
124.0
|
|
||||
Operating income
|
26.2
|
|
|
10.1
|
|
33.0
|
|
|
22.4
|
|
||||
Earnings
|
$
|
15.8
|
|
|
$
|
4.8
|
|
$
|
18.6
|
|
|
$
|
11.7
|
|
Transportation volumes (MMdk)
|
36.8
|
|
|
25.8
|
|
68.8
|
|
|
53.1
|
|
||||
Gathering volumes (MMdk)
|
11.6
|
|
|
16.9
|
|
25.8
|
|
|
34.4
|
|
||||
Customer natural gas storage balance (MMdk):
|
|
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
27.3
|
|
|
32.9
|
|
36.0
|
|
|
58.8
|
|
||||
Net injection (withdrawal)
|
13.1
|
|
|
(1.2
|
)
|
4.4
|
|
|
(27.1
|
)
|
||||
End of period
|
40.4
|
|
|
31.7
|
|
40.4
|
|
|
31.7
|
|
||||
* Reflects a net benefit related to the natural gas gathering operations litigation, as discussed in Note 18.
|
•
|
Lower operation and maintenance expense, largely due to a net benefit related to the natural gas gathering operations litigation, as discussed in Note 18, partially offset by an impairment of certain natural gas gathering assets of $1.7 million (after tax), largely due to low natural gas prices
|
•
|
Increased transportation volumes of $900,000 (after tax), largely higher volumes transported to storage
|
•
|
Lower gathering volumes of $4.1 million (after tax), as previously discussed
|
•
|
Lower storage services revenue of $1.7 million (after tax), largely lower average storage balances
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
||||
|
(Dollars in millions, where applicable)
|
|||||||||||
Operating revenues:
|
|
|
|
|
||||||||
Oil
|
$
|
85.1
|
|
$
|
68.5
|
|
$
|
158.6
|
|
$
|
127.0
|
|
Natural gas
|
20.8
|
|
44.3
|
|
47.2
|
|
89.7
|
|
||||
|
105.9
|
|
112.8
|
|
205.8
|
|
216.7
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||
Operation and maintenance:
|
|
|
|
|
|
|
|
|
||||
Lease operating costs
|
19.0
|
|
18.4
|
|
37.5
|
|
36.4
|
|
||||
Gathering and transportation
|
4.2
|
|
5.6
|
|
8.5
|
|
11.3
|
|
||||
Other
|
9.5
|
|
9.2
|
|
18.7
|
|
17.5
|
|
||||
Depreciation, depletion and amortization
|
34.4
|
|
33.4
|
|
71.2
|
|
67.6
|
|
||||
Taxes, other than income:
|
|
|
|
|
||||||||
Production and property taxes
|
8.7
|
|
10.5
|
|
18.3
|
|
20.5
|
|
||||
Other
|
.3
|
|
.2
|
|
.6
|
|
.5
|
|
||||
|
76.1
|
|
77.3
|
|
154.8
|
|
153.8
|
|
||||
Operating income
|
29.8
|
|
35.5
|
|
51.0
|
|
62.9
|
|
||||
Earnings
|
$
|
18.0
|
|
$
|
21.3
|
|
$
|
30.9
|
|
$
|
37.6
|
|
Production:
|
|
|
|
|
||||||||
Oil (MBbls)
|
1,085
|
|
821
|
|
2,042
|
|
1,623
|
|
||||
Natural gas (MMcf)
|
8,239
|
|
11,253
|
|
18,286
|
|
23,011
|
|
||||
Total production (MBOE)
|
2,458
|
|
2,696
|
|
5,090
|
|
5,458
|
|
||||
Average realized prices (including hedges):
|
|
|
|
|
||||||||
Oil (per Bbl)
|
$
|
78.51
|
|
$
|
83.42
|
|
$
|
77.67
|
|
$
|
78.26
|
|
Natural gas (per Mcf)
|
$
|
2.52
|
|
$
|
3.94
|
|
$
|
2.58
|
|
$
|
3.90
|
|
Average realized prices (excluding hedges):
|
|
|
|
|
||||||||
Oil (per Bbl)
|
$
|
71.89
|
|
$
|
89.25
|
|
$
|
77.86
|
|
$
|
84.31
|
|
Natural gas (per Mcf)
|
$
|
1.46
|
|
$
|
3.49
|
|
$
|
1.72
|
|
$
|
3.44
|
|
Average depreciation, depletion and amortization rate, per BOE
|
$
|
13.32
|
|
$
|
11.76
|
|
$
|
13.32
|
|
$
|
11.76
|
|
Production costs, including taxes, per BOE:
|
|
|
|
|||||||||
Lease operating costs
|
$
|
7.74
|
|
$
|
6.83
|
|
$
|
7.37
|
|
$
|
6.67
|
|
Gathering and transportation
|
1.70
|
|
2.07
|
|
1.66
|
|
2.06
|
|
||||
Production and property taxes
|
3.54
|
|
3.87
|
|
3.58
|
|
3.76
|
|
||||
|
$
|
12.98
|
|
$
|
12.77
|
|
$
|
12.61
|
|
$
|
12.49
|
|
•
|
Lower average realized natural gas prices of 36 percent
|
•
|
Decreased natural gas production of 27 percent, largely related to a decision to curtail production, normal production declines, deferral of certain natural gas development activity and divestment at existing properties
|
•
|
Lower average realized oil prices of 6 percent
|
•
|
Higher depreciation, depletion and amortization expense of $700,000 (after tax), due to higher depletion rates, partially offset by lower volumes
|
•
|
Increased oil production of 32 percent, largely related to drilling activity in the Bakken area, Paradox Basin, as well as at the South Texas properties
|
•
|
Lower production taxes of $1.1 million (after tax), largely resulting from lower oil and natural gas prices excluding hedges
|
•
|
Lower average realized natural gas prices of 34 percent
|
•
|
Decreased natural gas production of 21 percent, as previously discussed
|
•
|
Higher depreciation, depletion and amortization expense of $2.3 million (after tax), as previously discussed
|
•
|
Higher general and administrative expense of $900,000 (after tax), including higher payroll-related costs
|
•
|
Increased oil production of 26 percent, largely related to drilling activity in the Bakken area, the South Texas properties, as well as the Paradox Basin
|
•
|
Lower gathering and transportation expense of $1.7 million (after tax), largely due to lower gathering costs resulting from lower volumes and lower gathering rates in the coalbed area
|
•
|
Lower production taxes of $1.4 million (after tax), largely resulting from lower natural gas prices excluding hedges
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
||||
|
(Dollars in millions)
|
|||||||||||
Operating revenues
|
$
|
442.1
|
|
$
|
375.6
|
|
$
|
591.5
|
|
$
|
519.2
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|||||
Operation and maintenance
|
396.7
|
|
334.2
|
|
553.7
|
|
481.1
|
|
||||
Depreciation, depletion and amortization
|
19.8
|
|
21.2
|
|
39.6
|
|
42.6
|
|
||||
Taxes, other than income
|
10.6
|
|
9.8
|
|
18.6
|
|
17.5
|
|
||||
|
427.1
|
|
365.2
|
|
611.9
|
|
541.2
|
|
||||
Operating income (loss)
|
15.0
|
|
10.4
|
|
(20.4
|
)
|
(22.0
|
)
|
||||
Earnings (loss)
|
$
|
7.8
|
|
$
|
5.0
|
|
$
|
(17.1
|
)
|
$
|
(16.4
|
)
|
Sales (000's):
|
|
|
|
|
|
|
|
|
||||
Aggregates (tons)
|
6,481
|
|
6,479
|
|
8,974
|
|
9,306
|
|
||||
Asphalt (tons)
|
1,761
|
|
1,842
|
|
1,861
|
|
2,007
|
|
||||
Ready-mixed concrete (cubic yards)
|
837
|
|
698
|
|
1,305
|
|
1,095
|
|
•
|
Increased construction margins of $2.3 million (after tax), largely due to favorable weather in the North Central and Intermountain regions and increased construction activity in the North Central region
|
•
|
Lower selling, general and administrative costs of $900,000 (after tax), largely lower benefit-related costs
|
•
|
Higher earnings of $800,000 (after tax) resulting from higher liquid asphalt oil volumes and margins
|
•
|
Higher earnings of $700,000 (after tax) resulting from higher aggregate margins, largely in the North Central region
|
•
|
Lower earnings of $2.3 million (after tax) resulting from lower asphalt margins, as previously discussed
|
•
|
Higher income taxes, primarily due to the absence of an income tax benefit of $2.0 million related to favorable resolution of certain income tax matters in 2011
|
•
|
Lower earnings of $1.7 million (after tax) resulting from lower aggregate margins, primarily due to higher costs
|
•
|
Increased construction margins of $2.4 million (after tax), as previously discussed
|
•
|
Higher earnings of $1.0 million (after tax) resulting from higher ready-mixed concrete volumes and margins, largely in the North Central region
|
•
|
Lower selling, general and administrative costs of $700,000 (after tax), including lower benefit-related costs
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
||||
|
(In millions)
|
|||||||||||
Operating revenues
|
$
|
224.1
|
|
$
|
198.1
|
|
$
|
442.3
|
|
$
|
401.5
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||
Operation and maintenance
|
198.6
|
|
178.3
|
|
386.6
|
|
363.2
|
|
||||
Depreciation, depletion and amortization
|
2.8
|
|
2.8
|
|
5.5
|
|
5.8
|
|
||||
Taxes, other than income
|
7.2
|
|
5.5
|
|
15.0
|
|
13.2
|
|
||||
|
208.6
|
|
186.6
|
|
407.1
|
|
382.2
|
|
||||
Operating income
|
15.5
|
|
11.5
|
|
35.2
|
|
19.3
|
|
||||
Earnings
|
$
|
8.7
|
|
$
|
6.1
|
|
$
|
20.1
|
|
$
|
10.8
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
||||
|
(In millions)
|
|||||||||||
Other:
|
|
|
|
|
||||||||
Operating revenues
|
$
|
2.5
|
|
$
|
2.8
|
|
$
|
4.6
|
|
$
|
5.3
|
|
Operation and maintenance
|
1.5
|
|
1.9
|
|
2.9
|
|
4.9
|
|
||||
Depreciation, depletion and amortization
|
.5
|
|
.4
|
|
1.0
|
|
.7
|
|
||||
Taxes, other than income
|
.1
|
|
—
|
|
—
|
|
.1
|
|
||||
Intersegment transactions:
|
|
|
|
|
|
|
||||||
Operating revenues
|
$
|
20.0
|
|
$
|
45.5
|
|
$
|
52.2
|
|
$
|
99.3
|
|
Purchased natural gas sold
|
13.0
|
|
34.3
|
|
42.9
|
|
81.2
|
|
||||
Operation and maintenance
|
7.0
|
|
11.2
|
|
9.3
|
|
18.1
|
|
•
|
Earnings per common share for 2012 are projected in the range of $1.00 to $1.25. The Company expects the approximate percentage of 2012 earnings per common share by quarter to be:
|
◦
|
Third quarter - 35 percent
|
◦
|
Fourth quarter - 25 percent
|
•
|
Although near term market conditions are uncertain, the Company's long-term compound annual growth goals on earnings per share from operations are in the range of 7 percent to 10 percent.
|
•
|
The Company continually seeks opportunities to expand through strategic acquisitions and organic growth opportunities.
|
•
|
The EPA approved the South Dakota Regional Haze Program which requires the Big Stone Station to install and operate a BART air quality control system to reduce emissions of particulate matter, sulfur dioxide and nitrogen oxides. The NDPSC issued an order approving advance determination of prudence for recovery of costs related to this system in electric rates charged to customers, as discussed in Note 17. The Company's share of the cost is estimated at $125 million.
|
•
|
The NDPSC issued an order approving the advance determination of prudence and a Certificate of Public Convenience and Necessity on the construction of an 88-MW simple cycle natural gas turbine and associated facilities, as discussed in Note 17.
|
•
|
The Company is analyzing potential projects for accommodating load growth in its industrial and agricultural sectors with company and customer-owned pipeline facilities designed to serve existing facilities currently served by fuel oil or propane, and to serve new customers. The Company is currently engaged on a 30-mile natural gas line project into the Hanford Nuclear Site in Washington.
|
•
|
Currently the Company is involved with a number of pipeline projects to enhance the reliability and deliverability of its system in the Pacific Northwest and Idaho.
|
•
|
The Company plans to invest approximately $75 million in 2012 to serve the growing electric and gas customer base associated with the Bakken oil development in western North Dakota and eastern Montana.
|
•
|
The Company is pursuing opportunities associated with the potential development of high-voltage transmission lines and system enhancements targeted towards delivery of energy to major market areas.
|
•
|
The Company and Calumet Refining, LLC are exploring the feasibility of jointly building and operating a 20,000 Bbl per day diesel topping plant in southwestern North Dakota. The facility would process Bakken crude and market the diesel within the Bakken region. Site selection, permitting, crude oil procurement, marketing and engineering studies are currently underway.
|
•
|
In May 2012, the Company announced an agreement purchasing 50 percent undivided interest in Whiting Oil and Gas Corporation's natural gas and oil midstream assets near Belfield, North Dakota in the Bakken area. The Company paid $66 million at closing and will be responsible for 60 percent of certain future capital expenditures as specified in the agreement. The Belfield natural gas processing plant has an inlet processing capacity of 35 MMcf per day. The oil terminal is currently under construction, with completion expected in the third quarter of 2012.
|
•
|
The Company expects average natural gas storage balances for the remainder of the year to be comparable to last year. The curtailment and/or divestment of certain natural gas properties and the deferral of certain gas development activity are expected to result in gathering volumes being lower in 2012 compared to last year. The decline is expected to be partially offset by higher transportation volumes related to growth projects placed in service in the Bakken area.
|
•
|
The Company continues to pursue expansion of facilities and services offered to customers. Energy development within its geographic region, which includes portions of Colorado, Wyoming, Montana and North Dakota, is expanding, most notably the Bakken of North Dakota and eastern Montana. The Company owns an extensive natural gas pipeline system in the Bakken area. Ongoing energy development is expected to have many direct and indirect benefits to this business.
|
•
|
In August 2012, the Company expects to place in service approximately 13 miles of high pressure transmission pipeline
|
•
|
The Company has increased its expected capital expenditures to approximately $475 million in 2012, up from $400 million. The Company continues its focus on returns by allocating the majority of its capital investment into the production of oil given the current commodity price environment.
|
•
|
For 2012, the Company now expects a 25 percent to 30 percent increase in oil production and a 25 percent to 30 percent decrease in natural gas production. The projected decline in natural gas production is primarily the result of a decision to curtail certain natural gas properties as well as divestments and the deferral of certain natural gas development activity because of sustained low natural gas prices.
|
•
|
The Company has a total of nine drilling rigs deployed on its acreage in the Bakken, Texas, Paradox and other areas.
|
•
|
Bakken Area
|
◦
|
The Company owns a total of approximately 124,000 net acres of leaseholds.
|
◦
|
Capital expenditures are expected to total approximately $215 million this year; an expansion of $115 million compared to 2011.
|
◦
|
Mountrail County, North Dakota
|
▪
|
The Company owns approximately 16,000 net acres of leaseholds targeting the middle Bakken and Three Forks formations. The drilling of 20 operated wells and participation in various non-operated wells is expected for this year.
|
▪
|
Approximately 40 remaining middle Bakken locations have been identified. This does not include any additional Three Forks potential, which is currently being evaluated. Estimated gross ultimate recovery rates per well are 250,000 to 500,000 Bbls.
|
◦
|
Stark County, North Dakota
|
▪
|
The Company holds approximately 51,000 net exploratory leasehold acres, targeting the Three Forks formation. The drilling of 14 operated wells and participation in various non-operated wells is expected for this year.
|
▪
|
Based on current information and assuming 1280-acre spacing, the Company has identified approximately 40 future drill sites. Estimated gross ultimate recovery rates per well are 250,000 to 400,000 Bbls.
|
◦
|
Richland County, Montana
|
▪
|
The Company holds approximately 57,000 net exploratory leasehold acres, targeting the Three Forks formation. The drilling of 6 operated wells is planned for this year.
|
▪
|
Approximately 100 potential gross well sites have been identified. Estimated gross ultimate recovery rates per well are 250,000 to 400,000 Bbls.
|
•
|
Niobrara - southeastern Wyoming
|
◦
|
The Company holds approximately 65,000 net exploratory leasehold acres.
|
◦
|
The drilling of 4 operated wells has been completed with approximately $25 million of capital expenditures. The economic viability of the Niobrara and other horizons is currently being evaluated.
|
◦
|
Approximately 200 potential gross well sites are available based on 640-acre spacing.
|
•
|
Paradox Basin - Cane Creek Federal Unit, Utah
|
◦
|
The Company holds approximately 75,000 net exploratory leasehold acres.
|
◦
|
The drilling of 6 to 8 operated wells is planned for this year with approximately $50 million of capital expenditures.
|
◦
|
Approximately 70 potential gross well sites have been identified. Estimated gross ultimate recovery rates per well range from 250,000 to 1,000,000 Bbls.
|
•
|
Texas
|
◦
|
The Company is targeting areas that have the potential for higher liquids content with approximately $60 million of capital planned for this year.
|
◦
|
Plans are to drill 13 operated wells in Texas this year and participate in some non-operated activity.
|
◦
|
Approximately 50 potential gross well sites have been identified. Estimated gross ultimate recovery rates per well are 250,000 to 400,000 Bbls.
|
•
|
Heath Shale
|
◦
|
The Company holds approximately 90,000 net exploratory leasehold acres in the Heath Shale oil prospect in Montana and expects to drill 5 wells this year with capital of approximately $35 million.
|
•
|
Sioux County, Nebraska
|
◦
|
The Company has entered into an exploration agreement where it will drill two vertical wells and one horizontal well during 2012. The first vertical well in the project has been drilled and is awaiting fracture stimulation, and the second vertical well is currently being drilled. The horizontal well is planned for the fourth quarter of this year. After evaluating these initial wells, the Company may exercise an option to purchase a 65 percent working interest in approximately 79,000 gross acres.
|
•
|
Other Opportunities
|
◦
|
The remaining forecasted 2012 capital has been allocated to other operated and non-operated opportunities, including $25 million for acquisitions of leaseholds.
|
•
|
Earnings guidance reflects estimated oil and natural gas prices for August through December as follows:
|
•
|
For the last
six
months of 2012, the Company has hedged approximately 55 percent to 60 percent of its estimated oil production and 60 percent to 65 percent of its estimated natural gas production. For
2013
, the Company has hedged 35 percent to 40 percent of its estimated oil production. The hedges that are in place as of August 1, 2012, are summarized in the following chart:
|
•
|
Work backlog as of June 30, 2012, was approximately $636 million, compared to approximately $649 million a year ago. The backlog includes a variety of projects such as highway paving projects, airports, bridge work, reclamation and harbor expansions.
|
•
|
The Company's backlog in the Bakken area of North Dakota is approximately $55 million.
|
•
|
Projected revenues included in the Company's 2012 earnings guidance are in the range of $1.4 billion to $1.5 billion.
|
•
|
The Company anticipates margins in 2012 to be slightly lower compared to 2011.
|
•
|
The Company continues to pursue opportunities for expansion in energy projects such as refineries, transmission, wind towers, and geothermal. Initiatives are aimed at capturing additional market share and expansion into new markets.
|
•
|
As the country's 5th largest sand and gravel producer, the Company will continue to strategically manage its 1.1 billion tons of aggregate reserves in all its markets, as well as take further advantage of being vertically integrated.
|
•
|
Of the ten labor contracts that Knife River was negotiating, as reported in Items 1 and 2 - Business and Properties - General in the
2011
Annual Report, five have been ratified. The five remaining contracts are still in negotiations.
|
•
|
Work backlog as of June 30, 2012, was approximately $344 million, compared to approximately $364 million a year ago. The backlog includes a variety of projects such as substation and line construction, solar and other commercial, institutional and industrial projects including refinery work.
|
•
|
The Company's backlog in the Bakken area of North Dakota is approximately $3 million.
|
•
|
Projected revenues included in the Company's 2012 earnings guidance are in the range of $775 million to $875 million.
|
•
|
The Company anticipates margins in 2012 to be higher compared to 2011.
|
•
|
The Company continues to pursue opportunities for expansion in energy projects such as refineries, transmission, substations, utility services, as well as solar. Initiatives are aimed at capturing additional market share and expansion into new markets.
|
•
|
System upgrades
|
•
|
Routine replacements
|
•
|
Service extensions
|
•
|
Routine equipment maintenance and replacements
|
•
|
Buildings, land and building improvements
|
•
|
Pipeline and gathering projects, including an acquisition as discussed in Note 15
|
•
|
Further development of existing properties, acquisition of additional leasehold acreage and exploratory drilling at the exploration and production segment
|
•
|
Power generation opportunities, including certain costs for additional electric generating capacity
|
•
|
Environmental upgrades
|
•
|
Other growth opportunities
|
|
|
MDU RESOURCES GROUP, INC.
|
|
|
|
|
|
DATE:
|
August 7, 2012
|
BY:
|
/s/ Doran N. Schwartz
|
|
|
|
Doran N. Schwartz
|
|
|
|
Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
BY:
|
/s/ Nicole A. Kivisto
|
|
|
|
Nicole A. Kivisto
|
|
|
|
Vice President, Controller and
Chief Accounting Officer
|
Exhibit No.
|
|
|
|
|
|
4
|
|
Centennial Energy Holdings, Inc. Credit Agreement, dated June 8, 2012, among Centennial Energy Holdings, Inc., U.S. Bank National Association, as Administrative Agent, and The Other Financial Institutions party thereto
|
|
|
|
+10(a)
|
|
MDU Resources Group, Inc. Non-Employee Director Long-Term Incentive Compensation Plan, as amended May 17, 2012
|
|
|
|
+10(b)
|
|
Instrument of Amendment to the MDU Resources Group, Inc. 401(k) Retirement Plan, dated May 24, 2012
|
|
|
|
12
|
|
Computation of Ratio of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Stock Dividends
|
|
|
|
31(a)
|
|
Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31(b)
|
|
Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32
|
|
Certification of Chief Executive Officer and Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
95
|
|
Mine Safety Disclosures
|
|
|
|
101
|
|
The following materials from MDU Resources Group, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements, tagged in summary and detail
|
Clause
|
|
|
Page
|
ARTICLE I
|
DEFINITIONS
|
1
|
1.01
|
Certain Defined Terms
|
1
|
1.02
|
Other Interpretive Provisions
|
18
|
1.03
|
Accounting Principles
|
19
|
1.04
|
Amendment and Restatement
|
20
|
ARTICLE II
|
THE FACILITY
|
20
|
2.01
|
The Facility
|
20
|
2.02
|
Advances
|
20
|
2.03
|
Method of Borrowing
|
21
|
2.04
|
Fees; Changes in Aggregate Commitment
|
21
|
2.05
|
Minimum Amount of Each Advance
|
22
|
2.06
|
Optional Principal Payments
|
23
|
2.07
|
Changes in Interest Rate, etc
|
23
|
2.08
|
Rates Applicable After Default
|
23
|
2.09
|
Method of Payment
|
23
|
2.10
|
Evidence of Debt; Telephonic Notices
|
24
|
2.11
|
Interest Payment Dates; Interest and Fee Basis
|
24
|
2.12
|
Notification of Advances, Interest Rates, Prepayments and Commitment Changes
|
24
|
2.13
|
Lending Installations
|
25
|
2.14
|
Non-Receipt of Funds by the Administrative Agent
|
25
|
2.15
|
Replacement of Bank
|
25
|
2.16
|
Letters of Credit
|
26
|
2.17
|
Additional Cash Collateral
|
30
|
2.18
|
Defaulting Banks
|
31
|
ARTICLE III
|
YIELD PROTECTION; TAXES
|
34
|
3.01
|
Increased Costs Generally
|
34
|
3.02
|
Changes in Capital Adequacy Regulations
|
35
|
3.03
|
Certificates for Reimbursement; Delay in Requests
|
35
|
3.04
|
Availability of Types of Advances
|
35
|
3.05
|
Funding Indemnification
|
35
|
3.06
|
Taxes
|
36
|
3.07
|
Mitigation Obligations
|
39
|
ARTICLE IV
|
CONDITIONS PRECEDENT
|
40
|
4.01
|
Initial Credit Extension
|
40
|
4.02
|
Each Credit Extension
|
41
|
Clause
|
|
|
Page
|
ARTICLE V
|
REPRESENTATIONS AND WARRANTIES
|
42
|
5.01
|
Existence and Power; Standing; Compliance With Laws
|
42
|
5.02
|
Corporate Authorization; No Contravention or Conflict
|
42
|
5.03
|
Governmental Authorization
|
42
|
5.04
|
Validity and Binding Effect
|
43
|
5.05
|
Litigation; Environmental Claims
|
43
|
5.06
|
No Default
|
43
|
5.07
|
ERISA Compliance
|
43
|
5.08
|
Use of Proceeds; Margin Regulations
|
43
|
5.09
|
Title to Properties
|
43
|
5.10
|
Taxes
|
44
|
5.11
|
Financial Condition
|
44
|
5.12
|
Environmental Matters
|
44
|
5.13
|
Regulated Entities
|
44
|
5.14
|
Copyrights, Patents, Trademarks and Licenses, etc
|
45
|
5.15
|
Subsidiaries
|
45
|
5.16
|
Insurance
|
45
|
5.17
|
Solvency
|
45
|
5.18
|
Full Disclosure
|
45
|
5.19
|
Senior Debt
|
45
|
ARTICLE VI
|
AFFIRMATIVE COVENANTS
|
45
|
6.01
|
Financial Statements
|
46
|
6.02
|
Certificates; Other Information
|
46
|
6.03
|
Notices
|
47
|
6.04
|
Preservation of Existence
|
47
|
6.05
|
Maintenance of Property
|
48
|
6.06
|
Insurance
|
48
|
6.07
|
Payment of Obligations
|
48
|
6.08
|
Compliance with Laws
|
48
|
6.09
|
Inspection of Property and Books and Records
|
48
|
6.10
|
Environmental Laws
|
49
|
6.11
|
Use of Proceeds
|
49
|
ARTICLE VII
|
NEGATIVE COVENANTS
|
49
|
7.01
|
Limitation on Liens
|
49
|
7.02
|
Disposition of Assets
|
51
|
7.03
|
Consolidations and Mergers
|
52
|
Clause
|
|
|
Page
|
7.04
|
Loans and Investments
|
53
|
7.05
|
Transactions with Affiliates
|
54
|
7.06
|
Use of Proceeds
|
54
|
7.07
|
Joint Ventures
|
55
|
7.08
|
Restricted Payments
|
55
|
7.09
|
Change in Business
|
55
|
7.10
|
Accounting Changes
|
55
|
7.11
|
Maximum Company Capitalization Ratio
|
56
|
7.12
|
Limitation on Subsidiary Indebtedness
|
56
|
7.13
|
Agreements Restricting Subsidiary Dividends
|
57
|
7.14
|
Activities of International Subsidiaries
|
57
|
ARTICLE VIII
|
EVENTS OF DEFAULT
|
57
|
8.01
|
Event of Default
|
57
|
8.02
|
Remedies
|
59
|
ARTICLE IX
|
THE ADMINISTRATIVE AGENT
|
60
|
9.01
|
Appointment; Nature of Relationship
|
60
|
9.02
|
Powers
|
60
|
9.03
|
General Immunity
|
61
|
9.04
|
No Responsibility for Loans, Recitals, etc
|
61
|
9.05
|
Action on Instructions of Banks
|
61
|
9.06
|
Employment of Agents and Counsel
|
61
|
9.07
|
Reliance on Documents; Counsel
|
62
|
9.08
|
Administrative Agent’s Reimbursement and Indemnification
|
62
|
9.09
|
Notice of Default
|
62
|
9.10
|
Rights as a Bank
|
62
|
9.11
|
Bank Credit Decision
|
63
|
9.12
|
Successor Administrative Agent
|
63
|
9.13
|
Administrative Agent’s and Co-Lead Arrangers’ Fees
|
64
|
9.14
|
Delegation to Affiliates
|
64
|
9.15
|
Other Agents
|
64
|
ARTICLE X
|
MISCELLANEOUS
|
64
|
10.01
|
Amendments and Waivers
|
64
|
10.02
|
Notices
|
65
|
10.03
|
No Waiver; Cumulative Remedies
|
66
|
10.04
|
Several Obligations; Benefits of this Agreement
|
66
|
10.05
|
Expenses; Indemnification
|
66
|
Clause
|
|
|
Page
|
10.06
|
Marshalling; Payments Set Aside
|
67
|
10.07
|
Successors and Assigns
|
67
|
10.08
|
Participations; Assignments, etc
|
68
|
10.09
|
Confidentiality
|
69
|
10.10
|
Set-off; Ratable Payments
|
70
|
10.11
|
Automatic Debits of Fees
|
71
|
10.12
|
Notification of Addresses, Lending Installations, Etc
|
71
|
10.13
|
Counterparts
|
71
|
10.14
|
Severability
|
71
|
10.15
|
GOVERNING LAW AND JURISDICTION
|
71
|
10.16
|
WAIVER OF JURY TRIAL
|
72
|
10.17
|
Entire Agreement
|
73
|
10.18
|
Survival of Representations
|
73
|
10.19
|
Governmental Regulation
|
73
|
10.20
|
Numbers of Documents
|
73
|
10.21
|
Nonliability of Banks
|
73
|
10.22
|
No Advisory or Fiduciary Responsibility
|
73
|
10.23
|
USA Patriot Act Notice
|
74
|
A
|
Form of Compliance Certificate
|
B-1
|
Form of Opinion of Paul K. Sandness
|
B-2
|
Form of Opinion of Cohen Tauber Spievack & Wagner P.C.
|
C
|
Form of Note
|
D
|
Form of Money Transfer Instructions
|
E-1 to E-4
|
Forms of Tax Compliance Certificates
|
F
|
Form of Assignment Agreement
|
G
|
Form of Increase Request
|
H
|
Form of Borrowing Notice
|
2.01 -
|
Commitments and Pro Rata Shares
|
2.16 -
|
Existing Letters of Credit
|
5.15 -
|
Subsidiaries and Minority Interests
|
7.01 -
|
Certain Permitted Liens
|
7.12 -
|
Certain Permitted Indebtedness
|
7.13 -
|
Agreements Restricting Subsidiary Dividends
|
10.02 -
|
Lending Installations; Addresses for Notices
|
Pricing Level
|
Applicable Amount (in basis points per annum)
|
||
|
Facility Fee
|
Eurodollar Advances/
Letter of Credit Fee
|
Base Rate Advances
|
1
|
10.0
|
77.5
|
0.0
|
2
|
12.5
|
87.5
|
0.0
|
3
|
15.0
|
97.5
|
0.0
|
4
|
20.0
|
105.0
|
5.0
|
5
|
25.0
|
125.0
|
25.0
|
6
|
30.0
|
145.0
|
45.0
|
Pricing Level
|
Pricing Rating
|
1
|
At least A
|
2
|
At least A-
|
3
|
At least BBB+
|
4
|
At least BBB
|
5
|
At least BBB-
|
6
|
Below BBB- or not rated.
|
|
CENTENNIAL ENERGY HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ Doran N. Schwartz
|
|
Name:
|
Doran N. Schwartz
|
|
Title:
|
Vice President and Chief Financial Officer
|
|
U.S. BANK NATIONAL ASSOCIATION, as
Administrative Agent, as an Issuer and as a Bank
|
|
|
|
|
|
|
|
|
By:
|
/s/ John Prigge
|
|
Name:
|
John Prigge
|
|
Title:
|
Vice President
|
|
UNION BANK, N.A., as Syndication Agent, as an
Issuer and as a Bank
|
|
|
|
|
|
|
|
|
By:
|
/s/ Robert Cole
|
|
Name:
|
Robert Cole
|
|
Title:
|
Vice President
|
|
JPMORGAN CHASE BANK, N.A., as a Co-
Documentation Agent, as an Issuer and as a Bank
|
|
|
|
|
|
|
|
|
By:
|
/s/ Helen D. Davis
|
|
Name:
|
Helen D. Davis
|
|
Title:
|
Vice President
|
|
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as a Co-Documentation Agent, as
an Issuer and as a Bank
|
|
|
|
|
|
|
|
|
By:
|
/s/ Keith Luettel
|
|
Name:
|
Keith Luettel
|
|
Title:
|
Vice President
|
|
TORONTO DOMINION (NEW YORK) LLC, as a
Co-Documentation Agent and as a Bank
|
|
|
|
|
|
|
|
|
By:
|
/s/ Vicki Ferguson
|
|
Name:
|
Vicki Ferguson
|
|
Title:
|
Authorized Signatory
|
|
ROYAL BANK OF CANADA, as a Co-
Documentation Agent and as a Bank
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kyle E. Hoffman
|
|
Name:
|
Kyle E. Hoffman
|
|
Title:
|
Authorized Signatory
|
|
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY
|
|
|
|
|
|
|
|
|
By:
|
/s/ Darrel Ho
|
|
Name:
|
Darrel Ho
|
|
Title:
|
Canadian Imperial Bank of Commerce
New York Agency
Authorized Signatory
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Eoin Roche
|
|
Name:
|
Eoin Roche
|
|
Title:
|
Canadian Imperial Bank of Commerce
New York Agency
Authorized Signatory
|
|
KEYBANK, NATIONAL ASSOCIATION
|
|
|
|
|
|
|
|
|
By:
|
/s/ Keven D. Smith
|
|
Name:
|
Keven D. Smith
|
|
Title:
|
Senior Vice President
|
|
SUNTRUST BANK
|
|
|
|
|
|
|
|
|
By:
|
/s/Andrew Johnson
|
|
Name:
|
Andrew Johnson
|
|
Title:
|
Director
|
|
PNC BANK, NATIONAL ASSOCIATION
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michael J. Cortese
|
|
Name:
|
Michael J. Cortese
|
|
Title:
|
AVP
|
|
THE BANK OF NOVA SCOTIA
|
|
|
|
|
|
|
|
|
By:
|
/s/ Thane Rattew
|
|
Name:
|
Thane Rattew
|
|
Title:
|
Managing Director
|
|
GOLDMAN SACHS BANK USA
|
|
|
|
|
|
|
|
|
By:
|
/s/ Mark Walton
|
|
Name:
|
Mark Walton
|
|
Title:
|
Authorized Signatory
|
|
UBS LOAN FINANCE LLC
|
||
|
|
|
|
|
|
|
|
|
By:
|
/s/ Iria R. Otsa
|
/s/ Mary E. Evans
|
|
Name:
|
Iria R. Otsa
|
Mary E. Evans
|
|
Title:
|
Associate Director
Banking Products
Services, US
|
Associate Director
Banking Products
Services, US
|
Bank
|
Commitment
|
Pro Rata Share
|
|||
U.S. Bank National Association
|
|
$50,000,000
|
|
10.000000000
|
%
|
Union Bank, N.A.
|
|
$50,000,000
|
|
10.000000000
|
%
|
JPMorgan Chase Bank, N.A.
|
|
$50,000,000
|
|
10.000000000
|
%
|
Wells Fargo Bank, National Association
|
|
$50,000,000
|
|
10.000000000
|
%
|
Toronto Dominion (New York) LLC
|
|
$40,000,000
|
|
8.000000000
|
%
|
Royal Bank of Canada
|
|
$40,000,000
|
|
8.000000000
|
%
|
Canadian Imperial Bank of Commerce, New York Agency
|
|
$40,000,000
|
|
8.000000000
|
%
|
KeyBank, National Association
|
|
$32,500,000
|
|
6.500000000
|
%
|
SunTrust Bank
|
|
$32,500,000
|
|
6.500000000
|
%
|
PNC Bank, National Association
|
|
$30,000,000
|
|
6.000000000
|
%
|
The Bank of Nova Scotia
|
|
$30,000,000
|
|
6.000000000
|
%
|
Goldman Sachs Bank USA
|
|
$27,500,000
|
|
5.500000000
|
%
|
UBS Loan Finance LLC
|
|
$27,500,000
|
|
5.500000000
|
%
|
TOTAL
|
|
$500,000,000
|
|
100.000000000
|
%
|
|
Schedule 2.01 – Page 1
|
|
|
Commitments and Pro Rata Shares
|
|
LC Number
|
Issue Date
|
Expiry Date
|
Beneficiary
|
Amount
|
|
|
|
|
|
SLCMMSP04935
|
12/24/11
|
12/24/12
|
Liberty Mutual Insurance Company
|
$19,713,500
|
SLCMMSP05285
|
8/1/11
|
8/1/12
|
State of Minnesota Self Insurance Division
|
$410,000
|
SLCNNSP05284
|
8/1/11
|
8/1/12
|
City of Sauk Rapids
|
$100,000
|
1.
|
Alaska Basic Industries, Inc., an Alaska corporation, 100%
|
2.
|
Ames Sand & Gravel, Inc., a North Dakota corporation, 100%
|
3.
|
Anchorage Sand and Gravel Company, Inc., an Alaska corporation , 100%
|
4.
|
Baldwin Contracting Company, Inc., a California corporation, 100%
|
5.
|
BEH Electric Holdings, LLC, a Nevada limited liability company, 100%
|
6.
|
Bell Electrical Contractors, Inc., a Missouri corporation, 100%
|
7.
|
Bitter Creek Pipelines, LLC, a Colorado limited liability company, 100%
|
8.
|
BMH Mechanical Holdings, LLC, a Nevada limited liability company, 100%
|
9.
|
Bombard Electric, LLC, a Nevada limited liability company, 100%
|
10.
|
Bombard Mechanical, LLC, a Nevada limited liability company, 100%
|
11.
|
Capital Electric Construction Company, Inc., a Kansas corporation, 100%
|
12.
|
Capital Electric Line Builders, Inc., a Kansas corporation, 100%
|
13.
|
Centennial Energy Resources International, Inc., a Delaware corporation, 100%
|
14.
|
Centennial Energy Resources LLC, a Delaware limited liability company, 100%
|
15.
|
Centennial Holdings Capital LLC, a Delaware limited liability company, 100%
|
16.
|
Central Oregon Redi-Mix, L.L.C., an Oregon limited liability company, 78%
|
17.
|
Concrete, Inc., a California corporation, 100%
|
18.
|
Connolly-Pacific Co., a California corporation, 100%
|
19.
|
Continental Line Builders, Inc., a Delaware corporation, 100%
|
20.
|
Coordinating and Planning Services, Inc., a Delaware corporation, 100%
|
21.
|
Desert Fire Holdings, Inc., a Nevada corporation, 100%
|
22.
|
Desert Fire Protection, a Nevada Limited Partnership, 100%
|
23.
|
Desert Fire Protection, Inc., a Nevada corporation, 100%
|
24.
|
Desert Fire Protection, LLC, a Nevada limited liability company, 100%
|
25.
|
D S S Company, a California corporation, 100%
|
26.
|
E.S.I., Inc., an Ohio corporation, 100%
|
27.
|
Fairbanks Materials, Inc., an Alaska corporation, 100%
|
28.
|
Fidelity Exploration & Production Company, a Delaware corporation, 100%
|
29.
|
Fidelity Oil Co., a Delaware corporation, 100%
|
30.
|
Frebco, Inc., an Ohio corporation, 100%
|
31.
|
FutureSource Capital Corp., a Delaware corporation, 100%
|
32.
|
Granite City Ready Mix, Inc., a Minnesota corporation, 100%
|
33.
|
Hamlin Electric Company, a Colorado corporation, 100%
|
34.
|
Harp Engineering, Inc., a Montana corporation, 100%
|
35.
|
Hawaiian Cement, a Hawaii partnership, 100%
|
36.
|
ILB Hawaii, Inc., a Hawaii corporation, 100%
|
37.
|
Independent Fire Fabricators, LLC, a Nevada limited liability company, 100%
|
38.
|
International Line Builders, Inc., a Delaware corporation, 100%
|
39.
|
InterSource Insurance Company, a Vermont corporation, 100%
|
40.
|
Jebro Incorporated, an Iowa corporation, 100%
|
41.
|
JTL Group, Inc., a Montana corporation, 100%
|
42.
|
JTL Group, Inc., a Wyoming corporation, 100%
|
43.
|
Kent’s Oil Service, a California corporation, 100%
|
44.
|
Knife River Corporation, a Delaware corporation, 100%
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45.
|
Knife River Corporation – North Central, a Minnesota corporation, 100%
|
46.
|
Knife River Corporation – Northwest, an Oregon corporation, 100%
|
47.
|
Knife River Corporation – South, a Texas corporation, 100%
|
48.
|
Knife River Dakota, Inc., a Delaware corporation, 100%
|
49.
|
Knife River Equipment, Inc., a Delaware corporation, 100%
|
50.
|
Knife River Hawaii, Inc., a Delaware corporation, 100%
|
51.
|
Knife River Marine, Inc., a Delaware corporation, 100%
|
52.
|
Knife River Midwest, LLC, a Delaware limited liability company, 100%
|
53.
|
KRC Holdings, Inc., a Delaware corporation, 100%
|
54.
|
LME&U Holdings, LLC, a Nevada limited liability company, 100%
|
55.
|
Lone Mountain Excavation & Utilities, LLC, a Nevada limited liability company, 100%
|
56.
|
Loy Clark Pipeline Co., an Oregon corporation, 100%
|
57.
|
LTM, Incorporated, an Oregon corporation, 100%
|
58.
|
MDU Brasil Ltda., a Brazil limited liability company, 100%
|
59.
|
MDU Construction Services Group, Inc., a Delaware corporation, 100%
|
60.
|
MDU Industrial Services, Inc., a Delaware corporation, 100%
|
61.
|
MDU Resources International LLC, a Delaware limited liability company, 100%
|
62.
|
MDU Resources Luxembourg I LLC S.a.r.l., a Luxembourg limited liability company, 100%
|
63.
|
MDU Resources Luxembourg II LLC S.a.r.l., a Luxembourg limited liability company, 100%
|
64.
|
Midland Technical Crafts, Inc., a Delaware corporation, 100%
|
65.
|
Netricity LLC, an Alaska limited liability company, 75%
|
66.
|
Nevada Solar Solutions, LLC, a Delaware limited liability company, 100%
|
67.
|
Nevada Solar Solutions II, LLC, a Delaware limited liability company, 100%
|
68.
|
Northstar Materials, Inc., a Minnesota corporation, 100%
|
69.
|
Oregon Electric Construction, Inc., an Oregon corporation, 100%
|
70.
|
Pouk & Steinle, Inc., a California corporation, 100%
|
71.
|
Prairielands Energy Marketing, Inc., a Delaware corporation, 100%
|
72.
|
Prairielands Magnetics Limited, a Scotland private limited company, 100%
|
73.
|
Rocky Mountain Contractors, Inc., a Montana corporation, 100%
|
74.
|
USI Industrial Services, Inc., a Delaware corporation, 100%
|
75.
|
The Wagner Group, Inc., a Delaware corporation, 100%
|
76.
|
Wagner Industrial Electric, Inc., a Delaware corporation, 100%
|
77.
|
The Wagner-Smith Company, an Ohio corporation, 100%
|
78.
|
Wagner-Smith Equipment Co., a Delaware corporation, 100%
|
79.
|
Wagner-Smith Pumps & Systems, Inc., an Ohio corporation, 100%
|
80.
|
Warner Enterprises, Inc., a Nevada corporation, 100%
|
81.
|
WBI Canadian Pipeline, Ltd., a Canadian corporation, 100%
|
82.
|
WBI Energy, Inc., a Delaware corporation, 100%
|
83.
|
WBI Energy Services, Inc., a Delaware corporation, 100%
|
84.
|
WBI Holdings, Inc., a Delaware corporation, 100%
|
85.
|
WHC, Ltd., a Hawaii corporation, 100%
|
86.
|
Williston Basin Interstate Pipeline Company, a Delaware corporation, 100%
|
II.
|
Affiliates
|
1.
|
Empresa Catarinense de Transmissão de Energia S.A., a Brazil corporation
|
|
Schedule 7.01 - Page 1
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|
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Existing Liens
|
|
Centennial Energy Holdings, Inc.
|
Amount
Outstanding
|
||
Prudential
|
$
|
516,000,000
|
|
Note Purchase Agreements
|
$
|
149,666,666
|
|
|
|
||
|
|
||
Knife River Corporation
|
|
||
Various Other Debt
|
$
|
3,168,534
|
|
|
|
||
MDU Construction Services Group, Inc.
|
|
||
Various Other Debt
|
$
|
293,208
|
|
|
|
||
WBI Holdings, Inc.
|
|
||
WBI
|
|
||
Prudential Insurance Company
|
$
|
100,000,000
|
|
|
|
||
Fidelity Exploration & Production Company
|
|
||
Various Capital Leases
|
$
|
2,924,144
|
|
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Schedule 7.12 - Page 1
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|
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Existing Indebtedness
|
|
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Schedule 7.13 – Page 1
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|
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Agreements Restricting
|
|
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Subsidiary Dividends
|
|
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Schedule 10.02 – Page 1
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|
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Notices, etc.
|
|
|
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I.
|
Section 7.01 – Liens
|
|
|||
|
A.
|
Aggregate amount of all Securitization Obligations secured by Liens
|
$_________
|
|
|
|
B.
|
Maximum permitted secured Securitization Obligations under Item I.A
|
|
$75,000,000
|
|
|
C.
|
Other Indebtedness secured by Liens permitted by Section 7.01(p) of the Credit Agreement
|
$_________
|
|
|
|
D.
|
Maximum permitted secured Indebtedness under Item I.C
|
|
$35,000,000
|
|
|
|
|
|
||
II.
|
Section 7.02 - Dispositions of Assets
|
|
|||
|
A.
|
Aggregate value of all assets sold by the Company and its Subsidiaries pursuant to Sections 7.02(i) through (iv) of the Credit Agreement
|
$_________
|
|
|
|
B.
|
Maximum permitted value of disposed assets under Item II.A (20% of total consolidated assets)
|
$_________
|
|
|
|
|
|
|
||
III.
|
Section 7.04 – Investments
|
|
|||
|
A.
|
Aggregate amount of investments in, Guaranty Obligations in respect of, or advances, loans, extensions of credit or capital contributions to, any Project Finance Subsidiary
|
$_________
|
|
|
|
B.
|
Maximum permitted investments, etc. under Item III.A
|
|
$75,000,000
|
|
|
C.
|
Other investments permitted by Section 7.04(i) of the Credit Agreement
|
$_________
|
|
|
|
D.
|
Maximum permitted investments under Item III.C (15% of Consolidated Net Worth)
|
$_________
|
|
|
|
E.
|
Investments in capital stock, equity or long-term fixed income securities of any Subsidiary (other than a Project Finance Subsidiary) that is not a Wholly-Owned Subsidiary, or otherwise undertaken pursuant to the Investment Policy
|
$_________
|
|
|
|
F.
|
Maximum permitted investments under Item III.E
|
|
$50,000,000
|
|
IV.
|
Section 7.08 - Restricted Payments
|
|
||
|
A.
|
Cash dividends or other distributions made by [COMPANY/APPLICABLE SUBSIDIARY] to its equity holders; purchases, redemptions or other acquisitions of shares of its capital stock or other equity interests or warrants, rights or options to acquire any such shares or other equity interests
|
$_________
|
|
|
B.
|
Maximum permitted dividends, etc. under Item IV.A (Maximum Annual RP Amount)
1
|
$_________
|
|
|
|
|
|
|
V.
|
Section 7.11 ‑ Company Capitalization Ratio
|
|
||
|
A.
|
Total Debt
|
|
|
|
|
1.
|
Indebtedness for borrowed money
|
$_________
|
|
|
2.
|
Redeemable Preferred Stock
|
$_________
|
|
|
3.
|
Deferred purchase price of property/services
|
$_________
|
|
|
4.
|
Surety Instrument reimbursement/payment obligations (excluding 80% of contingent liability on unsecured surety bonds)
|
$_________
|
|
|
5.
|
Other indebtedness evidenced by instruments
|
$_________
|
|
|
6.
|
Conditional sale/title retention agreements
|
$_________
|
|
|
7.
|
Capital leases
|
$_________
|
|
|
8.
|
Net liabilities under Swap Contracts (excluding Covered Contracts)
|
$_________
|
|
|
9.
|
Other indebtedness secured by property
|
$_________
|
|
|
10.
|
Securitization Obligations
|
$_________
|
|
|
11.
|
Guaranty Obligations
|
$_________
|
|
|
12.
|
Total Debt (sum of Items V.A.1 through V.A.11, on a consolidated basis, without duplication)
|
$_________
|
|
|
|
B.
|
Total Capitalization
|
|
|||
|
|
1.
|
Total stockholders’ or owners’ equity of the Company (excluding Accounting Standards Codification 815-20-25-104 adjustments in respect of Covered Contracts)
|
$_________
|
|
|
|
|
2.
|
Total Debt (Item V.A.l2)
|
$_________
|
|
|
|
|
3.
|
Total Capitalization (sum of Item V.B.1
plus
Item V.B.2)
|
$
_________
|
|
|
|
C.
|
Capitalization Ratio (Item V.A.12 / Item V.B.3)
|
______%
|
|
||
|
D.
|
Maximum Capitalization Ratio permitted
|
65%
|
|
||
|
|
|
|
|||
VI.
|
Section 7.12 ‑ Subsidiary Indebtedness
|
|
||||
|
A.
|
Sum of (i) the aggregate stated amount of Letters of Credit issued jointly for the account of the Company and Centennial International plus (ii) the aggregate amount of intercompany loans and other advances made by the Company or any Subsidiary (other than any International Subsidiary) to the International Subsidiaries
|
$_____________
|
|
||
|
B.
|
Maximum permitted Indebtedness under Item VI.A
|
|
$100,000,000
|
|
|
|
C.
|
Aggregate outstanding principal amount of Indebtedness of the International Subsidiaries (including with respect to intercompany loans and advances (other than any loan or advance made by an International Subsidiary) and Letters of Credit)
|
$_____________
|
|
||
|
D.
|
Maximum permitted Indebtedness under Item VI.C (10% of the result of (a) Consolidated Net Worth less (b) the aggregate book value of consolidated intangible assets of the Company and its Subsidiaries)
|
$_____________
|
|
||
|
E.
|
Indebtedness of Williston Basin Interstate Pipeline Company
|
$_____________
|
|
||
|
F.
|
Maximum permitted Indebtedness under Item VI.E
|
|
$175,000,000
|
|
|
G.
|
Other Subsidiary Indebtedness not permitted by Sections 7.12(i) through (vi) of the Credit Agreement
|
$_____________
|
|
|
|
H.
|
Maximum permitted Indebtedness under Item VI.G
|
|
$50,000,000
|
|
•
|
U.S. Bank National Association
|
•
|
Union Bank, N.A.
|
•
|
JPMorgan Chase Bank, N.A.
|
•
|
Wells Fargo Bank, National Association
|
•
|
Toronto Dominion (Texas) LLC
|
•
|
Royal Bank of Canada
|
•
|
Canadian Imperial Bank of Commerce, New York Agency
|
•
|
KeyBank, National Association
|
•
|
SunTrust Bank
|
•
|
PNC Bank, National Association
|
•
|
Goldman Sachs Bank USA
|
•
|
UBS Loan Finance LLC
|
•
|
The Bank of Nova Scotia
|
•
|
PNC Bank, National Association
|
•
|
U.S. Bank National Association
|
•
|
Union Bank, N.A.
|
•
|
JPMorgan Chase Bank, N.A.
|
•
|
Wells Fargo Bank, National Association
|
•
|
Toronto Dominion (Texas) LLC
|
•
|
Royal Bank of Canada
|
•
|
Canadian Imperial Bank of Commerce, New York Agency
|
•
|
KeyBank, National Association
|
•
|
SunTrust Bank
|
•
|
PNC Bank, National Association
|
•
|
Goldman Sachs Bank USA
|
•
|
UBS Loan Finance LLC
|
•
|
The Bank of Nova Scotia
|
•
|
PNC Bank, National Association
|
CENTENNIAL ENERGY HOLDINGS, INC.
|
|
|
|
|
|
By:
|
|
Name:
|
|
Title:
|
|
Date
|
Principal
Amount of
Loan
|
Maturity
of Interest
Period
|
Principal
Amount Paid
|
Unpaid
Balance
|
To:
|
U.S. Bank National Association, as Administrative Agent
|
Re:
|
Second Amended and Restated Credit Agreement dated as of June 8, 2012 (as amended, modified, renewed or extended from time to time, the “Credit Agreement”) among Centennial Energy Holdings, Inc. (the “Company”), the Banks party thereto and the Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned thereto in the Credit Agreement.
|
[NAME OF BANK]
|
|
By:
_______________________________________
|
|
|
Name:
|
|
Title:
|
[NAME OF PARTICIPANT]
|
|
|
|
By:
_______________________________________
|
|
|
Name:
|
|
Title:
|
[NAME OF PARTICIPANT]
|
|
|
|
By:
_______________________________________
|
|
|
Name:
|
|
Title:
|
[NAME OF BANK]
|
|
By:
_______________________________________
|
|
|
Name:
|
|
Title:
|
5. Credit Agreement:
|
The Second Amended and Restated Credit Agreement dated as of June 8, 2012 among Centennial Energy Holdings, Inc., the Banks
|
Aggregate Amount of
Commitment/Loans for all Banks
|
Amount of Commitment/Loans Assigned
|
Percentage Assigned of
Commitment/Loans
|
$
|
$
|
%
|
$
|
$
|
%
|
$
|
$
|
%
|
Re:
|
Second Amended and Restated Credit Agreement dated as of June 8, 2012 (as amended or otherwise modified from time to time, the “Agreement”; capitalized terms used but not otherwise defined herein have the respective meanings assigned to them in the Agreement) among Centennial Energy Holdings, Inc. (the “Company”), various financial instutions and U.S. Bank National Association, as Administrative Agent
|
|
Exhibit H ‑ Page
6
Borrowing Notice
|
|
|
Exhibit H ‑ Page
7
Borrowing Notice
|
|
|
Exhibit H ‑ Page
8
Borrowing Notice
|
|
(a)
|
The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2.4; or
|
(b)
|
Individuals who, as of April 22, 1997, which is the effective date of the Plan, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
|
(c)
|
Consummation of a reorganization, merger or consolidation or sale or other disposition of all or
|
(d)
|
Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
|
(a)
|
Any restriction periods and restrictions imposed on Restricted Stock or Awards granted pursuant to Article 8 (if not performance-based) shall be deemed to have expired and such Restricted Stock or Awards shall become immediately vested in full; and
|
(b)
|
The target payout opportunity attainable under all outstanding Awards of Performance Units, Performance Shares and Awards granted pursuant to Article 8 (if performance-based) shall be deemed to have been fully earned for the entire Performance Period(s) as of the effective date of the Change in Control, and shall be paid out promptly in Shares or cash pursuant to the terms of the Award Agreement, or in the absence of such designation, as the Committee shall determine.
|
1.
|
By replacing Section 3.1
Savings Contributions
, (a)
Maximum
in its entirety, with the following:
|
(a)
|
Maximum.
A Participant may contribute, by payroll deduction, any whole percentage of the Participant’s Compensation for each pay period to the Participant’s Savings Contribution Account, subject to the following maximum percentages: (i) 50% of the Participant’s Compensation if the Participant is not a Highly Compensated Employee, and (ii) 22% of the Participant’s Compensation if the Participant is a Highly Compensated Employee.
|
2.
|
By replacing Section 3.1
Savings Contributions
, (c) and (d) in their entirety, with the following:
|
(c)
|
Upon becoming a Participant, and at any time thereafter, each Participant may elect the percentage of Compensation to be contributed as a Savings Contribution to the Plan. Any such election will take effect as soon as administratively feasible. Each election by a Participant under this Section shall be made pursuant to the method established by the Committee for this purpose.
|
(d)
|
Effective September 1, 2007, if a Participant fails to make an election within thirty (30) days of becoming a Participant, the Participant shall be deemed to have elected to have three percent (3%) of Compensation withheld and contributed to the Plan, effective as soon as administratively feasible following the thirty (30) day period. Prior to the date an automatic deferral election is effective, the Participant shall receive a notice that explains the automatic deferral feature, the Eligible Employee’s right to elect not to have Compensation automatically reduced, and the procedure for making an alternate election. An automatic deferral election shall be treated, for all purposes of the Plan, as a voluntary deferral election.
|
(e)
|
Notwithstanding a Participant’s election under Subsection 3.1(c) or deemed election under Subsection 3.1(d) above, each Participant who is contributing less than fifteen percent (15%) of Compensation to the Plan on January 16, 2012, and January 1 of each year thereafter, shall be deemed to have elected to increase the Participant’s deferral percentage by one percent (1%) on and after March 1, 2012, and January 1 of each year thereafter; provided, however, that this Subsection 3.1(e) shall not apply to any Participant who has elected to opt out of Savings Contributions or elected to opt out of the automatic deferral escalation feature.
|
(f)
|
Savings Contributions must be contributed to the Trust Fund as soon as practicable, but in no event later than the fifteenth (15
th
) business day of the month following the month in which such deferrals were made. Savings Contributions made pursuant to Subsection 3.1(d) or (e) above shall be invested pursuant to Subsection 5.2(a) below.
|
3.
|
By replacing Section 5.2
Investment
, (a) in its entirety, with the following:
|
(a)
|
Each Participant’s Accounts and earnings credited to such Accounts on and after the Effective Date will be invested in one or more of the Investment Funds. Each Participant will designate the proportion (expressed as a percentage in multiples of one percent (1%)) of such Participant’s Accounts to be invested in each Investment Fund. Such designation, once made, can be changed at any time and will take effect as soon as administratively feasible. Participants may also, at any time and independent of changing their election of investment of future savings contributions, transfer the amount equivalent to the Participant’s interest or any partial interest (expressed as a percentage in multiples of one percent (1%) or in dollars) from one Investment Fund to another. Any designation made under this Section 5.2(a) shall be made pursuant to the method established by the Committee for this purpose.
|
4.
|
By replacing the table in Section D‑1‑2
Eligibility to Share in the Profit Sharing Feature
of Supplement D-1,
Provisions Relating to the Profit Sharing Feature for Certain Participating Affiliates
, in its entirety, with the following:
|
Participating Affiliate
|
Current Effective Date
(Original Effective Date)
2
|
Anchorage Sand & Gravel Company, Inc. (excluding President)
|
January 1, 1999
|
Baldwin Contracting Company, Inc.
|
January 1, 1999
|
Bell Electrical Contractors, Inc.
|
January 1, 2002
|
Bitter Creek Pipelines, LLC
1/3
|
January 1, 2010
(January 1, 2001)
|
Cascade Natural Gas Corporation
|
January 1, 2011
July 2, 2007
|
Concrete, Inc.
|
January 1, 2001
|
Connolly-Pacific Co.
|
January 1, 2007
|
DSS Company
|
January 1, 2004
(July 8, 1999)
|
E.S.I., Inc.
|
January 1, 2008
(January 1, 2003)
|
Fairbanks Materials, Inc.
|
May 1, 2008
|
Granite City Ready Mix, Inc.
|
June 1, 2002
|
Participating Affiliate
|
Current Effective Date
(Original Effective Date)
2
|
Great Plains Natural Gas Co.
|
January 1, 2008
|
Hawaiian Cement (non-union employees hired after December 31, 2005)
|
January 1, 2009
|
Intermountain Gas Company
|
January 1, 2011
|
Jebro Incorporated
|
November 1, 2005
|
Kent’s Oil Service
4
|
January 1, 2007
|
Knife River Corporation – Northwest (the Central Oregon Division, f/k/a HTS)
|
January 1, 2010
(January 1, 1999)
|
Knife River Corporation – Northwest (the Southern Idaho Division)
|
January 1, 2010
(January 1, 2006)
|
Knife River Corporation – Northwest (the Southern Oregon Division)
|
January 1, 2012
|
Knife River Corporation – Northwest (the Spokane Division)
|
January 1, 2010
(January 1, 2006)
|
Knife River Corporation – Northwest (the Western Oregon Division)
|
January 1, 2012
|
Knife River Corporation - South
(f/k/a Young Contractors, Inc.)
|
January 1, 2008
(January 1, 2007)
|
LTM, Incorporated
|
January 1, 2003
|
Montana-Dakota Utilities Co. (including union employees)
|
January 1, 2008
|
Oregon Electric Construction, Inc.
3
|
March 7, 2011
|
Prairielands Energy Marketing, Inc.
|
January 1, 2012
|
Wagner Industrial Electric, Inc.
|
January 1, 2008
|
Participating Affiliate
.
|
Current Effective Date
(Original Effective Date)
2
|
Wagner Smith Equipment Co.
|
January 1, 2008
(July 1, 2000)
|
WBI Holdings, Inc.
1/3
|
January 1, 2009
|
WHC, Ltd.
|
September 1, 2001
|
Williston Basin Interstate Pipeline
Company
1/3
|
January 1, 2009
|
5.
|
By replacing Section D‑2‑2
Eligibility to Share in the Retirement Contribution
of Supplement D-2,
Provisions Relating to the Retirement Contribution Feature for Certain Participating Affiliates
, in its entirety, with the following:
|
Participating Affiliate
|
Current Effective Date (Original
Effective Date)
|
Special Contribution Amount – Percentage of
Compensation
|
Bitter Creek Pipelines, LLC
1
|
January 1, 2006 (January 1, 2001)
|
5%
|
Cascade Natural Gas Corporation (non-bargaining)
|
January 1, 2011
(July 2, 2007)
|
5%
|
Participating Affiliate
|
Current Effective Date (Original
Effective Date)
|
Special Contribution Amount – Percentage of
Compensation
|
Cascade Natural Gas Corporation (Field Operations Bargaining Unit employees hired on or after 1/1/2007)
|
July 2, 2007
|
4%
|
Fidelity Exploration & Production
Company
2
|
January 1, 2006
(July 2, 2001)
|
5%
|
Great Plains Natural Gas Co.
|
January 1, 2003
|
5%
|
Hamlin Electric Company
|
January 1, 2005
|
5%
|
Intermountain Gas Company
|
January 1, 2011
(October 12, 2008)
|
5%
|
Oregon Electric Construction, Inc.
|
March 7, 2011
|
6%
|
Rocky Mountain Contractors, Inc. (Union)
3
|
January 1, 2008
|
3%
|
Rocky Mountain Contractors, Inc.
|
January 1, 2005
|
5%
|
6.
|
By replacing the table in Section D‑3‑2
Eligibility to Share in the Profit Sharing Feature
of Supplement D-3,
Provisions Relating to the Profit Sharing Feature for Certain Participating Affiliates
, in its entirety, with the following:
|
Participating Affiliate
|
Current Effective Date (Original Effective
Date)
|
Ames Sand & Gravel, Inc.
|
July 16, 2007
|
Knife River – ND Division, a Division of Knife River Corporation – North Central
|
January 1, 2007
|
Knife River- Western North Dakota Division, a Division of Knife River Corporation – North Central
|
March 17, 2011
|
Knife River Corporation – North Central
|
January 1, 2007
|
Knife River Midwest, LLC (Western Iowa Division)
|
April 1, 2007 (April 1, 2004)
|
Knife River Midwest, LLC (Central Iowa Division, f/k/a Becker Gravel, Inc.)
|
January 1, 2012
|
Northstar Materials, Inc.
|
January 1, 2003
|
7.
|
By replacing Supplement D-5,
Provisions Relating to the Knife River Corporation – Northwest (Western Oregon Division, f/k/a MBI) Retirement Contribution Feature
in its entirety with the word RESERVED, effective January 1, 2012.
|
8.
|
By replacing the second to last paragraph of Section D‑6‑2
Eligibility to Share in the Retirement Contribution
of Supplement D-6,
Provisions Relating to the MDU Resources Group, Inc. Retirement Contribution Feature
, in its entirety, with the following:
|
9.
|
By replacing the second paragraph of Section D‑6A‑2
Eligibility to Share in the Retirement Contribution
of Supplement D-6A,
Provisions Relating to the Retirement Contribution Feature
, in its entirety, with the following:
|
10.
|
By adding the following new entry to Schedule B:
|
|
MDU RESOURCES GROUP, INC.
|
||
|
EMPLOYEE BENEFITS COMMITTEE
|
||
|
|
|
|
|
|
|
|
|
By:
|
/s/ Doran N. Schwartz
|
|
|
|
Doran N. Schwartz, Chairman
|
|
Twelve
Months Ended
June 30, 2012
|
|
Year Ended
December 31, 2011
|
|
||||||
|
(In thousands of dollars)
|
|
||||||||
Earnings Available for Fixed Charges:
|
|
|
|
|
|
|||||
Net Income (a)
|
|
$
|
221,823
|
|
|
$
|
223,842
|
|
|
|
Income Taxes
|
|
119,249
|
|
|
110,273
|
|
|
|||
|
|
341,072
|
|
|
334,115
|
|
|
|||
Rents (b)
|
|
13,564
|
|
|
13,568
|
|
|
|||
Interest (c)
|
|
82,275
|
|
|
86,505
|
|
|
|||
Total Earnings Available for Fixed Charges
|
|
$
|
436,911
|
|
|
$
|
434,188
|
|
|
|
|
|
|
|
|
|
|||||
Preferred Dividend Requirements
|
|
$
|
685
|
|
|
$
|
685
|
|
|
|
Ratio of Income Before Income Taxes to Net Income
|
|
154
|
%
|
|
149
|
%
|
|
|||
Preferred Dividend Factor on Pretax Basis
|
|
1,055
|
|
|
1,021
|
|
|
|||
Fixed Charges (d)
|
|
102,264
|
|
|
106,348
|
|
|
|||
Combined Fixed Charges and Preferred Stock Dividends
|
|
$
|
103,319
|
|
|
$
|
107,369
|
|
|
|
Ratio of Earnings to Fixed Charges
|
|
4.3x
|
|
|
4.1x
|
|
|
|||
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
|
|
4.2x
|
|
|
4.0x
|
|
|
(a)
|
Net income excludes undistributed income for equity investees.
|
(b)
|
Represents interest portion of rents estimated at 33 1/3%.
|
(c)
|
Represents interest, amortization of debt discount and expense on all indebtedness and amortization of interest capitalized, and excludes amortization of gains or losses on reacquired debt (which, under the Federal Energy Regulatory Commission Uniform System of Accounts, is classified as a reduction of, or increase in, interest expense in the Consolidated Statements of Income) and interest capitalized.
|
(d)
|
Represents rents (as defined above), interest, amortization of debt discount and expense on all indebtedness, and excludes amortization of gains or losses on reacquired debt (which, under the Federal Energy Regulatory Commission Uniform System of Accounts, is classified as a reduction of, or increase in, interest expense in the Consolidated Statements of Income).
|
1.
|
I have reviewed this quarterly report on Form 10-Q of MDU Resources Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
1.
|
I have reviewed this quarterly report on Form 10-Q of MDU Resources Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
1.
|
Citations issued under Section 104 of the Mine Safety Act for violations that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard.
|
2.
|
Orders issued under Section 104(b) of the Mine Safety Act. Orders are issued under this section when citations issued under Section 104 have not been totally abated within the time period allowed by the citation or subsequent extensions.
|
3.
|
Citations or orders issued under Section 104(d) of the Mine Safety Act. Citations or orders are issued under this section when it has been determined that the violation is caused by an unwarrantable failure of the mine operator to comply with the standards. An unwarrantable failure occurs when the mine operator is deemed to have engaged in aggravated conduct constituting more than ordinary negligence.
|
4.
|
Citations issued under Section 110(b)(2) of the Mine Safety Act for flagrant violations. Violations are considered flagrant for repeat or reckless failures to make reasonable efforts to eliminate a known violation of a mandatory health and safety standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury.
|
5.
|
Imminent danger orders issued under Section 107(a) of the Mine Safety Act. An imminent danger is defined as the existence of any condition or practice in a coal or other mine which could reasonably be expected to cause death or serious physical harm before such condition or practice can be abated.
|
6.
|
Notice received under Section 104(e) of the Mine Safety Act of a pattern of violations or the potential to have such a pattern of violations that could significantly and substantially contribute to the cause and effect of mine health and safety standards.
|
MSHA Identification Number
|
Section 104 S&S Citations (#)
|
Total Dollar Value of MSHA Assessments Proposed ($)
|
Legal Actions Pending as of Last Day of Period (#)
|
Legal Actions Initiated During Period (#)
|
Legal Actions Resolved During Period (#)
|
||||||
04-00081
|
2
|
|
$
|
300
|
|
4
|
|
—
|
|
—
|
|
04-01698
|
—
|
|
—
|
|
2
|
|
—
|
|
—
|
|
|
04-05140
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
04-05156
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
|
10-02089
|
1
|
|
460
|
|
—
|
|
—
|
|
—
|
|
|
10-02209
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
13-02152
|
—
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
21-00462
|
3
|
|
100
|
|
1
|
|
—
|
|
—
|
|
|
21-02702
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|
21-03096
|
—
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
21-03502
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
|
24-02095
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|
32-00776
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
|
|
32-00777
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|
32-00778
|
6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
35-00495
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
|
35-00512
|
—
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
35-02906
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
|
35-03321
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
|
35-03449
|
—
|
|
—
|
|
5
|
|
—
|
|
—
|
|
|
35-03465
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|
35-03581
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|
35-03605
|
—
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
35-03642
|
—
|
|
200
|
|
—
|
|
—
|
|
—
|
|
|
35-03667
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
|
35-03678
|
—
|
|
392
|
|
—
|
|
—
|
|
3
|
|
|
41-02639
|
—
|
|
200
|
|
—
|
|
—
|
|
—
|
|
|
48-01383
|
—
|
|
900
|
|
—
|
|
—
|
|
5
|
|
|
48-01670
|
—
|
|
176
|
|
—
|
|
—
|
|
1
|
|
|
51-00036
|
4
|
|
—
|
|
—
|
|
—
|
|
3
|
|
|
51-00171
|
—
|
|
138
|
|
—
|
|
—
|
|
—
|
|
|
51-00245
|
—
|
|
300
|
|
—
|
|
—
|
|
—
|
|
|
51-00305
|
—
|
|
100
|
|
—
|
|
—
|
|
—
|
|
|
|
20
|
|
$
|
3,666
|
|
18
|
|
—
|
|
31
|
|
•
|
Contests of Citations and Orders - A contest proceeding may be filed with the Commission by operators, miners or miners' representatives to challenge the issuance of a citation or order issued by MSHA.
|
•
|
Contests of Proposed Penalties (Petitions for Assessment of Penalties) - A contest of a proposed penalty is an administrative proceeding before the Commission challenging a civil penalty that MSHA has proposed for the alleged violation contained in a citation or order.
|
•
|
Complaints for Compensation - A complaint for compensation may be filed with the Commission by miners entitled to
|
•
|
Complaints of Discharge, Discrimination or Interference - A discrimination proceeding is a case that involves a miner's allegation that he or she has suffered a wrong by the operator because he or she engaged in some type of activity protected under the Mine Act, such as making a safety complaint.
|
•
|
Applications for Temporary Relief - Applications for temporary relief from any modification or termination of any order or from any order issued under section 104 of the Mine Act.
|
•
|
Appeals of Judges' Decisions or Orders to the Commission - A filing with the Commission for discretionary review of a judge's decision or order by a person who has been adversely affected or aggrieved by such decision or order.
|
MSHA Identification Number
|
Contests of Citations and Orders
|
Contests of Proposed Penalties
|
Complaints for Compensation
|
Complaints of Discharge, Discrimination or Interference
|
Applications for Temporary Relief
|
Appeals of Judges' Decisions or Orders to the Commission
|
||||||
04-00081
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
04-01698
|
—
|
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
04-05156
|
—
|
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
21-00462
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
35-03449
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
35-03667
|
—
|
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1
|
|
13
|
|
—
|
|
—
|
|
—
|
|
4
|
|