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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
AUGUST 12, 2005 (AUGUST 11, 2005)
MDU RESOURCES GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-3480 41-0423660
(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
SCHUCHART BUILDING
918 EAST DIVIDE AVENUE
P.O. BOX 5650
BISMARCK, NORTH DAKOTA 58506-5650
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (701) 222-7900
CHECK THE APPROPRIATE BOX BELOW IF THE FORM 8-K FILING IS INTENDED TO
SIMULTANEOUSLY SATISFY THE FILING OBLIGATION OF THE REGISTRANT UNDER ANY OF THE
FOLLOWING PROVISIONS:
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(17 CFR 230.425)
|_| SOLICITING MATERIAL PURSUANT TO RULE 14A-12 UNDER THE EXCHANGE ACT
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EXCHANGE ACT (17 CFR 240.14D-2(B))
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EXCHANGE ACT (17 CFR 240.13E-4(C))
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ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS;
CHANGE IN FISCAL YEAR.
Effective as of August 11, 2005, the MDU Resources Group, Inc. (the
"Company") Board of Directors amended Company Bylaw Sections 3.02 and 5.01
relating to the eligibility to serve as a Director or high ranking executive.
The present Company Bylaw Section 3.02 provides that a person who is not an
officer of the Company may not serve as a Director beyond the date he or she
turns 70 and a "high ranking executive" serving as a Director may not serve
beyond the date he or she turns 65. Section 5.01 of the Bylaws provides that a
"high ranking executive" of the Company may not serve in that position beyond
the date he or she turns 65.
The amendments to Section 3.02 provide that a non-officer Director cannot
serve beyond the first regular meeting of the Board of Directors after the date
he or she turns 70 and a "high ranking executive" serving as a Director cannot
serve beyond the first regular meeting of the Board of Directors after the date
he or she turns 65. The amendments to Section 5.01 provide that a "high ranking
executive" serving as a Director may similarly retain his or her officer
position through the first regular meeting of the Board following the date he or
she turns 65.
The amendments provide for a more appropriate transition for a retiring
Director and will avoid the situation where a Director is eligible to serve at
the time that meeting notices and materials for the next Board and Committee
meetings are sent out, but then would have become ineligible to continue serving
at the time of the meeting as result of an intervening birthday. The changes
also allow the "high ranking executive" serving as a Director to retain his or
her officer title through the first regular meeting of the Board after he or she
turns 65.
Company Bylaw Sections 3.02 and 5.01, as amended, are attached as Exhibit
99.
ITEM 8.01. OTHER EVENTS.
2005 Earnings Per Common Share Guidance
---------------------------------------
In anticipation of meetings with members of the investment community, the
Company has reaffirmed, as of August 12, 2005, its prior guidance, set forth in
the Company's June 30, 2005 Quarterly Report on Form 10-Q ("Form 10-Q"), that
earnings per common share for 2005, diluted, are projected in the range of $1.90
to $2.10.
The following updates a number of key growth strategies, projections and
certain assumptions set forth in the Form 10-Q under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Prospective Information" for the Company and its subsidiaries since the filing
of the Form 10-Q. The reaffirmation of earnings per common share is based on
these updates as well as the other key strategies, projections and assumptions
set forth in the Form 10-Q, to which there have been no material changes since
the filing of the Form 10-Q, and which are incorporated herein by reference.
2
o In 2006, the Company's natural gas and oil production segment expects a
combined natural gas and oil production increase of approximately 6 percent
to 10 percent over 2005 levels. In 2005, the Company expects combined
natural gas and oil production to approximate the record levels achieved in
2004, assuming continued production from existing wells at its Badger Hills
Project in southeastern Montana. The Badger Hills Project has been the
subject of two related actions filed in the Montana Federal District Court,
in connection with which the Montana Federal District Court issued orders
enjoining operations on the project. Subsequently, the Montana Federal
District Court issued temporary stays of the injunction orders in these
cases, thereby permitting continued production at the project pending
further developments in the cases. Currently, this segment's net combined
natural gas and oil production is approximately 200,000 Mcf equivalent to
210,000 Mcf equivalent per day.
o The Company's natural gas and oil production segment has hedged a portion
of its natural gas and oil production. The Company has entered into
agreements representing approximately 43 percent to 47 percent of its last
6 months of 2005 estimated natural gas production and approximately 35
percent to 40 percent of its last 6 months of 2005 estimated oil
production. The Company has entered into agreements representing
approximately 25 percent to 30 percent of its 2006 estimated natural gas
production and approximately 15 percent to 20 percent of its 2006 estimated
oil production. The hedges that are in place as of August 11, 2005, for
production in the last six months of 2005 and the twelve months of 2006 are
summarized below:
Price Swap or
Forward Costless Collar
Period Notional Volume Floor-Ceiling
Commodity Index* Outstanding (MMBtu)/(Bbl) (Per MMBtu/Bbl)
---------------------------------------------------------------------------------
Natural Gas Ventura 7/05 - 12/05 920,000 $5.00
Natural Gas Ventura 7/05 - 12/05 920,000 $4.75-$5.25
Natural Gas Ventura 7/05 - 12/05 1,840,000 $5.41-$6.80
Natural Gas Ventura 7/05 - 12/05 1,840,000 $5.00-$5.865
Natural Gas CIG 7/05 - 12/05 1,840,000 $5.25-$6.47
Natural Gas Ventura 7/05 - 12/05 920,000 $5.15
Natural Gas NYMEX 7/05 - 12/05 920,000 $6.50-$8.70
Natural Gas Ventura 7/05 - 12/05 1,840,000 $5.56
Natural Gas Ventura 7/05 - 12/05 920,000 $5.50-$7.18
Natural Gas CIG 11/05 - 12/05 549,000 $7.05
Natural Gas NYMEX 8/05 - 12/05 1,530,000 $7.50-$8.40
Natural Gas Ventura 1/06 - 12/06 1,825,000 $6.00-$7.60
Natural Gas Ventura 1/06 - 12/06 3,650,000 $6.655
Natural Gas CIG 1/06 - 03/06 900,000 $7.16
Natural Gas CIG 1/06 - 03/06 810,000 $7.05
Natural Gas Ventura 1/06 - 12/06 1,825,000 $6.75-$7.71
Natural Gas Ventura 1/06 - 12/06 1,825,000 $6.75-$7.77
Natural Gas Ventura 1/06 - 12/06 1,825,000 $7.00-$8.85
Natural Gas NYMEX 1/06 - 12/06 1,825,000 $7.75-$8.50
Natural Gas Ventura 1/06 - 12/06 1,825,000 $7.76
Natural Gas CIG 4/06 - 12/06 1,375,000 $6.50-$6.98
Crude Oil NYMEX 7/05 - 12/05 82,800 $32.00-$36.50
Crude Oil NYMEX 7/05 - 12/05 92,000 $43.00-$52.05
Crude Oil NYMEX 7/05 - 12/05 63,770 $39.00-$47.20
3
Crude Oil NYMEX 7/05 - 12/05 92,000 $30.70
Crude Oil NYMEX 1/06 - 12/06 182,500 $43.00-$54.15
Crude Oil NYMEX 1/06 - 12/06 146,000 $60.00-$69.20
* Ventura is an index pricing point related to Northern Natural Gas Co.'s system;
CIG is an index pricing point related to Colorado Interstate Gas Co.'s system.
Other
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The recent passage of a transportation funding bill, the Safe, Accountable,
Flexible and Efficient Transportation Equity Act -- A Legacy for Users, will
positively influence the Company's construction materials and mining operations
and represents a 31-percent increase over previous funding levels. Knife River
Corporation, the Company's construction materials and mining business unit, will
see average annual funding increases in each of its 11 states of operation
ranging from a high of 46 percent in Minnesota to a low of 19 percent in Hawaii.
Alaska, Idaho, Montana, North Dakota, Oregon, and Wyoming will each see average
annual funding increases of slightly more than 30 percent. California will
receive a 34-percent average annual increase while Iowa receives a 25-percent
boost and Texas gets a 37-percent increase. The 2005 earnings per share guidance
does not reflect the potential effects of the bill.
The recent energy policy bill could also be positive for the rest of the
Company's operations, although it is too early to quantify its effects. In 2004,
the Company derived 75 percent of its earnings from its energy-related
operations including natural gas and oil production, pipeline and energy
services, independent power production, electric and natural gas distribution,
and utility services. The 2005 earnings per share guidance does not reflect the
potential effects of the bill.
Forward-looking Statements
--------------------------
The foregoing earnings per share guidance for 2005 and statements with
respect to the potential effect of the recent transportation funding bill and
energy policy bill on the Company's operations, constitute forward-looking
statements on behalf of the Company, within the meaning of Section 21E of the
Securities Exchange Act of 1934. Although the Company believes that its
expectations are based on reasonable assumptions, actual results may differ
materially. For a discussion of the important factors that could cause actual
results to differ, reference is made to the sections entitled "Introduction" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Risk Factors and Cautionary Statements that May Affect Future
Results" in the Form 10-Q, both of which are incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENT AND EXHIBITS.
(c) Exhibits
99 Company Bylaw Sections 3.02 and 5.01, as amended.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MDU RESOURCES GROUP, INC.
Date August 12, 2005 BY /s/ Warren L. Robinson
--------------------- ----------------------------
Warren L. Robinson
Executive Vice President and
Chief Financial Officer
5
EXHIBIT INDEX
Exhibit Number Description of Exhibit
-------------- ----------------------
99 Company Bylaw Sections 3.02 and 5.01, as amended.
6