ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF | |
THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF | |
THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 41-0423660 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer ý | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company o |
Abbreviation or Acronym | |
2011 Annual Report | Company's Annual Report on Form 10-K for the year ended December 31, 2011 |
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 |
BOPD | Barrels of oil per day |
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 third quarter of 2012 and 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 |
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. (5.01 percent ownership interest at September 30, 2012, 2.5, 2.5 and 14.99 percent ownership interests were sold in the third quarter of 2012 and 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 |
Hawaiian Cement | Hawaiian Cement, an indirect wholly owned subsidiary of Knife River |
IFRS | International Financial Reporting Standards |
Intermountain | Intermountain Gas Company, an indirect wholly owned subsidiary of MDU Energy Capital |
IP rates | Initial production rates |
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 |
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 |
MTPSC | Montana Public Service Commission |
MW | Megawatt |
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 |
WI | Working interest |
WUTC | Washington Utilities and Transportation Commission |
Part I -- Financial Information | Page |
Consolidated Statements of Income -- Three and Nine Months Ended September 30, 2012 and 2011 | |
Consolidated Statements of Comprehensive Income -- Three and Nine Months Ended September 30, 2012 and 2011 | |
Consolidated Balance Sheets -- September 30, 2012 and 2011, and December 31, 2011 | |
Consolidated Statements of Cash Flows -- Nine Months Ended September 30, 2012 and 2011 | |
Notes to Consolidated Financial Statements | |
Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Quantitative and Qualitative Disclosures About Market Risk | |
Controls and Procedures | |
Part II -- Other Information | |
Legal Proceedings | |
Risk Factors | |
Unregistered Sales of Equity Securities and Use of Proceeds | |
Mine Safety Disclosures | |
Exhibits | |
Signatures | |
Exhibit Index | |
Exhibits |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
(In thousands, except per share amounts) | ||||||||||||
Operating revenues: | ||||||||||||
Electric, natural gas distribution and pipeline and energy services | $ | 184,863 | $ | 212,848 | $ | 784,399 | $ | 964,866 | ||||
Exploration and production, construction materials and contracting, construction services and other | 988,655 | 939,333 | 2,209,889 | 2,019,877 | ||||||||
Total operating revenues | 1,173,518 | 1,152,181 | 2,994,288 | 2,984,743 | ||||||||
Operating expenses: | ||||||||||||
Fuel and purchased power | 17,634 | 17,357 | 51,247 | 48,784 | ||||||||
Purchased natural gas sold | 35,199 | 50,102 | 279,038 | 396,326 | ||||||||
Operation and maintenance: | ||||||||||||
Electric, natural gas distribution and pipeline and energy services | 67,830 | 69,475 | 188,945 | 207,465 | ||||||||
Exploration and production, construction materials and contracting, construction services and other | 793,850 | 767,519 | 1,793,347 | 1,663,927 | ||||||||
Depreciation, depletion and amortization | 91,850 | 88,897 | 260,858 | 256,861 | ||||||||
Taxes, other than income | 41,090 | 39,410 | 132,017 | 131,591 | ||||||||
Write-down of oil and natural gas properties (Note 5) | 160,100 | — | 160,100 | — | ||||||||
Total operating expenses | 1,207,553 | 1,032,760 | 2,865,552 | 2,704,954 | ||||||||
Operating income (loss) | (34,035 | ) | 119,421 | 128,736 | 279,789 | |||||||
Earnings from equity method investments | 2,388 | 826 | 4,025 | 2,260 | ||||||||
Other income | 1,702 | 1,282 | 4,050 | 5,090 | ||||||||
Interest expense | 19,840 | 19,589 | 56,929 | 61,642 | ||||||||
Income (loss) before income taxes | (49,785 | ) | 101,940 | 79,882 | 225,497 | |||||||
Income taxes | (20,253 | ) | 37,840 | 24,516 | 73,632 | |||||||
Income (loss) from continuing operations | (29,532 | ) | 64,100 | 55,366 | 151,865 | |||||||
Income (loss) from discontinued operations, net of tax (Note 9) | (139 | ) | (126 | ) | 4,867 | 154 | ||||||
Net income (loss) | (29,671 | ) | 63,974 | 60,233 | 152,019 | |||||||
Dividends declared on preferred stocks | 171 | 171 | 514 | 514 | ||||||||
Earnings (loss) on common stock | $ | (29,842 | ) | $ | 63,803 | $ | 59,719 | $ | 151,505 | |||
Earnings (loss) per common share - basic: | ||||||||||||
Earnings (loss) before discontinued operations | $ | (.16 | ) | $ | .34 | $ | .29 | $ | .80 | |||
Discontinued operations, net of tax | — | — | .03 | — | ||||||||
Earnings (loss) per common share - basic | $ | (.16 | ) | $ | .34 | $ | .32 | $ | .80 | |||
Earnings (loss) per common share - diluted: | ||||||||||||
Earnings (loss) before discontinued operations | $ | (.16 | ) | $ | .34 | $ | .29 | $ | .80 | |||
Discontinued operations, net of tax | — | — | .03 | — | ||||||||
Earnings (loss) per common share - diluted | $ | (.16 | ) | $ | .34 | $ | .32 | $ | .80 | |||
Dividends declared per common share | $ | .1675 | $ | .1625 | $ | .5025 | $ | .4875 | ||||
Weighted average common shares outstanding - basic | 188,831 | 188,794 | 188,824 | 188,753 | ||||||||
Weighted average common shares outstanding - diluted | 188,831 | 188,797 | 189,029 | 188,760 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
(In thousands) | ||||||||||||
Net income (loss) | $ | (29,671 | ) | $ | 63,974 | $ | 60,233 | $ | 152,019 | |||
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 $(5,377) and $19,481 for the three months ended and $4,570 and $19,367 for the nine months ended in 2012 and 2011, respectively | (9,125 | ) | 32,547 | 7,962 | 31,787 | |||||||
Less: Reclassification adjustment for gain (loss) on derivative instruments included in net income (loss), net of tax of $4,570 and $(320) for the three months ended and $4,126 and $45 for the nine months ended in 2012 and 2011, respectively | 7,782 | (534 | ) | 7,029 | 77 | |||||||
Net unrealized gain (loss) on derivative instruments qualifying as hedges | (16,907 | ) | 33,081 | 933 | 31,710 | |||||||
Foreign currency translation adjustment, net of tax of $(8) and $(905) for the three months ended and $(273) and $(736) for the nine months ended in 2012 and 2011, respectively | (5 | ) | (1,401 | ) | (440 | ) | (1,140 | ) | ||||
Net unrealized gain on available-for-sale investments, net of tax of $21 and $0 for the three months ended and $32 and $56 for the nine months ended in 2012 and 2011, respectively | 39 | — | 60 | 103 | ||||||||
Other comprehensive income (loss) | (16,873 | ) | 31,680 | 553 | 30,673 | |||||||
Comprehensive income (loss) | $ | (46,544 | ) | $ | 95,654 | $ | 60,786 | $ | 182,692 |
September 30, 2012 | September 30, 2011 | December 31, 2011 | |||||||
(In thousands, except shares and per share amounts) | |||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 74,242 | $ | 118,702 | $ | 162,772 | |||
Receivables, net | 743,274 | 641,389 | 646,251 | ||||||
Inventories | 315,767 | 269,569 | 274,205 | ||||||
Deferred income taxes | 25,345 | 14,713 | 40,407 | ||||||
Commodity derivative instruments | 19,193 | 38,794 | 27,687 | ||||||
Prepayments and other current assets | 71,579 | 48,851 | 43,316 | ||||||
Total current assets | 1,249,400 | 1,132,018 | 1,194,638 | ||||||
Investments | 102,139 | 109,249 | 109,424 | ||||||
Property, plant and equipment | 8,129,872 | 7,506,833 | 7,646,222 | ||||||
Less accumulated depreciation, depletion and amortization | 3,546,927 | 3,307,433 | 3,361,208 | ||||||
Net property, plant and equipment | 4,582,945 | 4,199,400 | 4,285,014 | ||||||
Deferred charges and other assets: | |||||||||
Goodwill | 636,039 | 634,931 | 634,931 | ||||||
Other intangible assets, net | 18,015 | 22,248 | 20,843 | ||||||
Other | 314,133 | 262,107 | 311,275 | ||||||
Total deferred charges and other assets | 968,187 | 919,286 | 967,049 | ||||||
Total assets | $ | 6,902,671 | $ | 6,359,953 | $ | 6,556,125 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Short-term borrowings | $ | 11,000 | $ | — | $ | — | |||
Long-term debt due within one year | 240,564 | 76,600 | 139,267 | ||||||
Accounts payable | 402,241 | 305,695 | 337,228 | ||||||
Taxes payable | 54,903 | 77,190 | 70,176 | ||||||
Dividends payable | 31,800 | 30,850 | 31,794 | ||||||
Accrued compensation | 48,792 | 44,100 | 47,804 | ||||||
Commodity derivative instruments | 2,072 | 3,028 | 13,164 | ||||||
Other accrued liabilities | 233,773 | 226,986 | 259,320 | ||||||
Total current liabilities | 1,025,145 | 764,449 | 898,753 | ||||||
Long-term debt | 1,502,413 | 1,347,014 | 1,285,411 | ||||||
Deferred credits and other liabilities: | |||||||||
Deferred income taxes | 797,249 | 746,946 | 769,166 | ||||||
Other liabilities | 834,934 | 710,465 | 827,228 | ||||||
Total deferred credits and other liabilities | 1,632,183 | 1,457,411 | 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 September 30, 2012, 189,332,485 at September 30, 2011 and 189,332,485 at December 31, 2011 | 189,369 | 189,332 | 189,332 | ||||||
Other paid-in capital | 1,038,066 | 1,034,411 | 1,035,739 | ||||||
Retained earnings | 1,550,569 | 1,556,550 | 1,586,123 | ||||||
Accumulated other comprehensive loss | (46,448 | ) | (588 | ) | (47,001 | ) | |||
Treasury stock at cost - 538,921 shares | (3,626 | ) | (3,626 | ) | (3,626 | ) | |||
Total common stockholders' equity | 2,727,930 | 2,776,079 | 2,760,567 | ||||||
Total stockholders' equity | 2,742,930 | 2,791,079 | 2,775,567 | ||||||
Total liabilities and stockholders' equity | $ | 6,902,671 | $ | 6,359,953 | $ | 6,556,125 |
Nine Months Ended | ||||||
September 30, | ||||||
2012 | 2011 | |||||
(In thousands) | ||||||
Operating activities: | ||||||
Net income | $ | 60,233 | $ | 152,019 | ||
Income from discontinued operations, net of tax | 4,867 | 154 | ||||
Income from continuing operations | 55,366 | 151,865 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation, depletion and amortization | 260,858 | 256,861 | ||||
Earnings, net of distributions, from equity method investments | (1,086 | ) | (314 | ) | ||
Deferred income taxes | 40,310 | 79,985 | ||||
Write-down of oil and natural gas properties | 160,100 | — | ||||
Changes in current assets and liabilities, net of acquisitions: | ||||||
Receivables | (89,596 | ) | (57,829 | ) | ||
Inventories | (40,386 | ) | (21,004 | ) | ||
Other current assets | (18,512 | ) | 2,976 | |||
Accounts payable | 21,811 | (8,037 | ) | |||
Other current liabilities | (32,994 | ) | 31,592 | |||
Other noncurrent changes | (19,683 | ) | (23,908 | ) | ||
Net cash provided by continuing operations | 336,188 | 412,187 | ||||
Net cash used in discontinued operations | (6,826 | ) | (572 | ) | ||
Net cash provided by operating activities | 329,362 | 411,615 | ||||
Investing activities: | ||||||
Capital expenditures | (629,776 | ) | (339,461 | ) | ||
Acquisitions, net of cash acquired | (67,253 | ) | (157 | ) | ||
Net proceeds from sale or disposition of property and other | 31,090 | 23,584 | ||||
Investments | 11,188 | (9,768 | ) | |||
Proceeds from sale of equity method investment | 2,394 | — | ||||
Net cash used in continuing operations | (652,357 | ) | (325,802 | ) | ||
Net cash provided by discontinued operations | — | — | ||||
Net cash used in investing activities | (652,357 | ) | (325,802 | ) | ||
Financing activities: | ||||||
Issuance of short-term borrowings | 2,900 | — | ||||
Repayment of short-term borrowings | — | (20,000 | ) | |||
Issuance of long-term debt | 400,443 | 300 | ||||
Repayment of long-term debt | (73,459 | ) | (83,805 | ) | ||
Proceeds from issuance of common stock | 88 | 5,744 | ||||
Dividends paid | (95,394 | ) | (92,473 | ) | ||
Excess tax benefit on stock-based compensation | 26 | 1,248 | ||||
Net cash provided by (used in) continuing operations | 234,604 | (188,986 | ) | |||
Net cash provided by discontinued operations | — | — | ||||
Net cash provided by (used in) financing activities | 234,604 | (188,986 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (139 | ) | (199 | ) | ||
Decrease in cash and cash equivalents | (88,530 | ) | (103,372 | ) | ||
Cash and cash equivalents -- beginning of year | 162,772 | 222,074 | ||||
Cash and cash equivalents -- end of period | $ | 74,242 | $ | 118,702 |
September 30, 2012 | September 30, 2011 | December 31, 2011 | |||||||
(In thousands) | |||||||||
Aggregates held for resale | $ | 88,632 | $ | 80,868 | $ | 78,518 | |||
Materials and supplies | 75,551 | 64,988 | 61,611 | ||||||
Asphalt oil | 47,084 | 26,851 | 32,335 | ||||||
Natural gas in storage (current) | 41,091 | 39,629 | 36,578 | ||||||
Merchandise for resale | 30,827 | 30,974 | 32,165 | ||||||
Other | 32,582 | 26,259 | 32,998 | ||||||
Total | $ | 315,767 | $ | 269,569 | $ | 274,205 |
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2012 | 2011 | 2012 | 2011 | |||||
(In thousands) | ||||||||
Weighted average common shares outstanding - basic | 188,831 | 188,794 | 188,824 | 188,753 | ||||
Effect of dilutive stock options and performance share awards | — | 3 | 205 | 7 | ||||
Weighted average common shares outstanding - diluted | 188,831 | 188,797 | 189,029 | 188,760 | ||||
Shares excluded from the calculation of diluted earnings per share | 434 | — | — | — |
Nine Months Ended | ||||||
September 30, | ||||||
2012 | 2011 | |||||
(In thousands) | ||||||
Interest, net of amount capitalized | $ | 57,956 | $ | 63,669 | ||
Income taxes paid (refunded), net | $ | 3,210 | $ | (11,331 | ) |
September 30, | ||||||
2012 | 2011 | |||||
(In thousands) | ||||||
Property, plant and equipment additions in accounts payable | $ | 68,636 | $ | 31,100 |
Nine Months Ended September 30, 2012 | Balance as of January 1, 2012* | Goodwill Acquired During the Year** | Balance as of September 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 | 1,108 | 104,276 | ||||||
Total | $ | 634,931 | $ | 1,108 | $ | 636,039 |
Nine Months Ended September 30, 2011 | Balance as of January 1, 2011* | Goodwill Acquired During the Year** | Balance as of September 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 |
September 30, 2012 | September 30, 2011 | December 31, 2011 | |||||||
(In thousands) | |||||||||
Customer relationships | $ | 21,310 | $ | 21,702 | $ | 21,702 | |||
Accumulated amortization | (11,192 | ) | (9,896 | ) | (10,392 | ) | |||
10,118 | 11,806 | 11,310 | |||||||
Noncompete agreements | 7,236 | 7,685 | 7,685 | ||||||
Accumulated amortization | (5,198 | ) | (5,222 | ) | (5,371 | ) | |||
2,038 | 2,463 | 2,314 | |||||||
Other | 10,979 | 12,901 | 11,442 | ||||||
Accumulated amortization | (5,120 | ) | (4,922 | ) | (4,223 | ) | |||
5,859 | 7,979 | 7,219 | |||||||
Total | $ | 18,015 | $ | 22,248 | $ | 20,843 |
Asset Derivatives | Location on Consolidated Balance Sheets | Fair Value at September 30, 2012 | Fair Value at September 30, 2011 | Fair Value at December 31, 2011 | ||||||
(In thousands) | ||||||||||
Designated as hedges: | ||||||||||
Commodity derivatives | Commodity derivative instruments | $ | 18,619 | $ | 38,458 | $ | 27,687 | |||
Other assets - noncurrent | 3,463 | 15,575 | 2,768 | |||||||
22,082 | 54,033 | 30,455 | ||||||||
Not designated as hedges: | ||||||||||
Commodity derivatives | Commodity derivative instruments | 574 | 336 | — | ||||||
Other assets - noncurrent | 63 | — | — | |||||||
637 | 336 | — | ||||||||
Total asset derivatives | $ | 22,719 | $ | 54,369 | $ | 30,455 |
Liability Derivatives | Location on Consolidated Balance Sheets | Fair Value at September 30, 2012 | Fair Value at September 30, 2011 | Fair Value at December 31, 2011 | ||||||
(In thousands) | ||||||||||
Designated as hedges: | ||||||||||
Commodity derivatives | Commodity derivative instruments | $ | 1,958 | $ | 1,723 | $ | 12,727 | |||
Other liabilities - noncurrent | 83 | 157 | 937 | |||||||
Interest rate derivatives | Other accrued liabilities | 7,779 | — | 827 | ||||||
Other liabilities - noncurrent | — | 3,491 | 3,935 | |||||||
9,820 | 5,371 | 18,426 | ||||||||
Not designated as hedges: | ||||||||||
Commodity derivatives | Commodity derivative instruments | 114 | 1,305 | 437 | ||||||
114 | 1,305 | 437 | ||||||||
Total liability derivatives | $ | 9,934 | $ | 6,676 | $ | 18,863 |
September 30, 2012 | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||
(In thousands) | ||||||||||||
Insurance investment contract | $ | 37,250 | $ | 11,134 | $ | — | $ | 48,384 | ||||
Mortgage-backed securities | 8,391 | 175 | (2 | ) | 8,564 | |||||||
U.S. Treasury securities | 1,758 | 47 | — | 1,805 | ||||||||
Total | $ | 47,399 | $ | 11,356 | $ | (2 | ) | $ | 58,753 |
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 September 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 September 30, 2012 | |||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
Money market funds | $ | — | $ | 21,816 | $ | — | $ | 21,816 | ||||
Available-for-sale securities: | ||||||||||||
Insurance investment contract* | — | 48,384 | — | 48,384 | ||||||||
Mortgage-backed securities | — | 8,564 | — | 8,564 | ||||||||
U.S. Treasury securities | — | 1,805 | — | 1,805 | ||||||||
Commodity derivative instruments | — | 22,719 | — | 22,719 | ||||||||
Total assets measured at fair value | $ | — | $ | 103,288 | $ | — | $ | 103,288 | ||||
Liabilities: | ||||||||||||
Commodity derivative instruments | $ | — | $ | 2,155 | $ | — | $ | 2,155 | ||||
Interest rate derivative instruments | — | 7,779 | — | 7,779 | ||||||||
Total liabilities measured at fair value | $ | — | $ | 9,934 | $ | — | $ | 9,934 |
Fair Value Measurements at September 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 September 30, 2011 | |||||||||
(In thousands) | ||||||||||||
Assets: | ||||||||||||
Money market funds | $ | — | $ | 56,194 | $ | — | $ | 56,194 | ||||
Available-for-sale securities: | ||||||||||||
Insurance investment contract* | — | 33,591 | — | 33,591 | ||||||||
Auction rate securities | — | 11,400 | — | 11,400 | ||||||||
Mortgage-backed securities | — | 8,570 | — | 8,570 | ||||||||
U.S. Treasury securities | — | 1,444 | — | 1,444 | ||||||||
Commodity derivative instruments | — | 54,369 | — | 54,369 | ||||||||
Total assets measured at fair value | $ | — | $ | 165,568 | $ | — | $ | 165,568 | ||||
Liabilities: | ||||||||||||
Commodity derivative instruments | $ | — | $ | 3,185 | $ | — | $ | 3,185 | ||||
Interest rate derivative instruments | — | 3,491 | — | 3,491 | ||||||||
Total liabilities measured at fair value | $ | — | $ | 6,676 | $ | — | $ | 6,676 |
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 September 30, 2012 | $ | 1,742,977 | $ | 1,906,673 | ||
Long-term debt at September 30, 2011 | $ | 1,423,614 | $ | 1,568,942 | ||
Long-term debt at December 31, 2011 | $ | 1,424,678 | $ | 1,592,807 |
Three Months Ended September 30, 2012 | External Operating Revenues | Inter- segment Operating Revenues | Earnings (Loss) on Common Stock | ||||||
(In thousands) | |||||||||
Electric | $ | 63,492 | $ | — | $ | 11,000 | |||
Natural gas distribution | 80,069 | — | (8,782 | ) | |||||
Pipeline and energy services | 41,302 | 7,046 | 3,273 | ||||||
184,863 | 7,046 | 5,491 | |||||||
Exploration and production | 100,380 | 8,076 | (87,748 | ) | |||||
Construction materials and contracting | 641,500 | 8,508 | 41,889 | ||||||
Construction services | 246,358 | 834 | 9,863 | ||||||
Other | 417 | 1,948 | 663 | ||||||
988,655 | 19,366 | (35,333 | ) | ||||||
Intersegment eliminations | — | (26,412 | ) | — | |||||
Total | $ | 1,173,518 | $ | — | $ | (29,842 | ) |
Three Months Ended September 30, 2011 | External Operating Revenues | Inter- segment Operating Revenues | Earnings on Common Stock | ||||||
(In thousands) | |||||||||
Electric | $ | 61,949 | $ | — | $ | 8,312 | |||
Natural gas distribution | 92,440 | — | (11,183 | ) | |||||
Pipeline and energy services | 58,459 | 10,591 | 5,221 | ||||||
212,848 | 10,591 | 2,350 | |||||||
Exploration and production | 96,803 | 23,956 | 22,497 | ||||||
Construction materials and contracting | 619,134 | — | 33,103 | ||||||
Construction services | 222,822 | 3,344 | 5,044 | ||||||
Other | 574 | 2,025 | 809 | ||||||
939,333 | 29,325 | 61,453 | |||||||
Intersegment eliminations | — | (39,916 | ) | — | |||||
Total | $ | 1,152,181 | $ | — | $ | 63,803 |
Nine Months Ended September 30, 2012 | External Operating Revenues | Inter- segment Operating Revenues | Earnings on Common Stock | ||||||
(In thousands) | |||||||||
Electric | $ | 174,410 | $ | — | $ | 22,977 | |||
Natural gas distribution | 504,805 | — | 10,314 | ||||||
Pipeline and energy services | 105,184 | 36,393 | 21,884 | ||||||
784,399 | 36,393 | 55,175 | |||||||
Exploration and production | 289,106 | 25,114 | (56,860 | ) | |||||
Construction materials and contracting | 1,229,731 | 11,756 | 24,748 | ||||||
Construction services | 688,368 | 1,078 | 29,951 | ||||||
Other | 2,684 | 4,303 | 6,705 | ||||||
2,209,889 | 42,251 | 4,544 | |||||||
Intersegment eliminations | — | (78,644 | ) | — | |||||
Total | $ | 2,994,288 | $ | — | $ | 59,719 |
Nine Months Ended September 30, 2011 | External Operating Revenues | Inter- segment Operating Revenues | Earnings on Common Stock | ||||||
(In thousands) | |||||||||
Electric | $ | 169,780 | $ | — | $ | 21,642 | |||
Natural gas distribution | 627,450 | — | 18,235 | ||||||
Pipeline and energy services | 167,636 | 47,836 | 16,913 | ||||||
964,866 | 47,836 | 56,790 | |||||||
Exploration and production | 262,604 | 74,889 | 60,093 | ||||||
Construction materials and contracting | 1,138,280 | — | 16,680 | ||||||
Construction services | 617,699 | 9,940 | 15,815 | ||||||
Other | 1,294 | 6,614 | 2,127 | ||||||
2,019,877 | 91,443 | 94,715 | |||||||
Intersegment eliminations | — | (139,279 | ) | — | |||||
Total | $ | 2,984,743 | $ | — | $ | 151,505 |
Other | ||||||||||||
Postretirement | ||||||||||||
Pension Benefits | Benefits | |||||||||||
Three Months Ended September 30, | 2012 | 2011 | 2012 | 2011 | ||||||||
(In thousands) | ||||||||||||
Components of net periodic benefit cost: | ||||||||||||
Service cost | $ | 349 | $ | 35 | $ | 437 | $ | 361 | ||||
Interest cost | 4,407 | 4,706 | 943 | 1,175 | ||||||||
Expected return on assets | (5,865 | ) | (5,679 | ) | (1,222 | ) | (1,263 | ) | ||||
Amortization of prior service credit | (22 | ) | (54 | ) | (534 | ) | (669 | ) | ||||
Amortization of net actuarial loss | 1,887 | 917 | 356 | 430 | ||||||||
Amortization of net transition obligation | — | — | 531 | 532 | ||||||||
Curtailment gain | (1,023 | ) | — | — | — | |||||||
Net periodic benefit cost, including amount capitalized | (267 | ) | (75 | ) | 511 | 566 | ||||||
Less amount capitalized | 185 | 323 | 314 | (41 | ) | |||||||
Net periodic benefit cost | $ | (452 | ) | $ | (398 | ) | $ | 197 | $ | 607 | ||
Other | ||||||||||||
Postretirement | ||||||||||||
Pension Benefits | Benefits | |||||||||||
Nine Months Ended September 30, | 2012 | 2011 | 2012 | 2011 | ||||||||
(In thousands) | ||||||||||||
Components of net periodic benefit cost: | ||||||||||||
Service cost | $ | 1,044 | $ | 1,689 | $ | 1,310 | $ | 1,083 | ||||
Interest cost | 13,223 | 14,625 | 3,124 | 3,525 | ||||||||
Expected return on assets | (17,596 | ) | (17,106 | ) | (3,667 | ) | (3,789 | ) | ||||
Amortization of prior service cost (credit) | (64 | ) | 33 | (1,078 | ) | (2,007 | ) | |||||
Amortization of net actuarial loss | 5,670 | 3,509 | 1,769 | 688 | ||||||||
Amortization of net transition obligation | — | — | 1,594 | 1,594 | ||||||||
Curtailment (gain) loss | (1,023 | ) | 1,218 | — | — | |||||||
Net periodic benefit cost, including amount capitalized | 1,254 | 3,968 | 3,052 | 1,094 | ||||||||
Less amount capitalized | 615 | 858 | 635 | (136 | ) | |||||||
Net periodic benefit cost | $ | 639 | $ | 3,110 | $ | 2,417 | $ | 1,230 |
• | 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 | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
(Dollars in millions, where applicable) | ||||||||||||
Electric | $ | 11.0 | $ | 8.3 | $ | 23.0 | $ | 21.7 | ||||
Natural gas distribution | (8.8 | ) | (11.2 | ) | 10.3 | 18.2 | ||||||
Pipeline and energy services | 3.3 | 5.2 | 21.9 | 16.9 | ||||||||
Exploration and production | (87.8 | ) | 22.5 | (56.9 | ) | 60.1 | ||||||
Construction materials and contracting | 41.9 | 33.1 | 24.7 | 16.7 | ||||||||
Construction services | 9.9 | 5.1 | 30.0 | 15.8 | ||||||||
Other | .8 | .9 | 1.9 | 2.0 | ||||||||
Earnings (loss) before discontinued operations | (29.7 | ) | 63.9 | 54.9 | 151.4 | |||||||
Income (loss) from discontinued operations, net of tax | (.1 | ) | (.1 | ) | 4.8 | .1 | ||||||
Earnings (loss) on common stock | $ | (29.8 | ) | $ | 63.8 | $ | 59.7 | $ | 151.5 | |||
Earnings (loss) per common share - basic: | ||||||||||||
Earnings (loss) before discontinued operations | $ | (.16 | ) | $ | .34 | $ | .29 | $ | .80 | |||
Discontinued operations, net of tax | — | — | .03 | — | ||||||||
Earnings (loss) per common share - basic | $ | (.16 | ) | $ | .34 | $ | .32 | $ | .80 | |||
Earnings (loss) per common share - diluted: | ||||||||||||
Earnings (loss) before discontinued operations | $ | (.16 | ) | $ | .34 | $ | .29 | $ | .80 | |||
Discontinued operations, net of tax | — | — | .03 | — | ||||||||
Earnings (loss) per common share - diluted | $ | (.16 | ) | $ | .34 | $ | .32 | $ | .80 | |||
Return on average common equity for the 12 months ended | 4.3 | % | 8.9 | % |
• | Increased construction margins, higher liquid asphalt oil margins and volumes, as well as lower selling, general and administrative expense at the construction materials and contracting business |
• | 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 |
• | A $100.9 million after-tax noncash write-down of oil and natural gas properties, lower average realized natural gas prices, as well as decreased natural gas production, partially offset by increased oil production at the exploration and production business |
• | Decreased retail sales volumes at the natural gas distribution business |
• | 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 |
• | Increased construction margins and lower selling, general and administrative expense, partially offset by higher income taxes at the construction materials and contracting business |
• | Lower operation and maintenance expense from existing operations largely related to a $15.0 million net benefit related to the natural gas gathering operations litigation, as discussed in Note 19, partially offset by lower natural gas gathering volumes from existing operations at the pipeline and energy services business |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
(Dollars in millions, where applicable) | ||||||||||||
Operating revenues | $ | 63.5 | $ | 61.9 | $ | 174.4 | $ | 169.8 | ||||
Operating expenses: | ||||||||||||
Fuel and purchased power | 17.6 | 17.4 | 51.2 | 48.8 | ||||||||
Operation and maintenance | 17.9 | 18.1 | 53.1 | 52.4 | ||||||||
Depreciation, depletion and amortization | 8.1 | 8.1 | 24.2 | 24.2 | ||||||||
Taxes, other than income | 2.6 | 2.4 | 7.9 | 7.5 | ||||||||
46.2 | 46.0 | 136.4 | 132.9 | |||||||||
Operating income | 17.3 | 15.9 | 38.0 | 36.9 | ||||||||
Earnings | $ | 11.0 | $ | 8.3 | $ | 23.0 | $ | 21.7 | ||||
Retail sales (million kWh) | 753.8 | 718.8 | 2,189.8 | 2,128.1 | ||||||||
Sales for resale (million kWh) | 8.9 | 35.3 | 11.8 | 63.9 | ||||||||
Average cost of fuel and purchased power per kWh | $ | .022 | $ | .022 | $ | .022 | $ | .021 |
• | Higher retail sales volumes of 5 percent, primarily to residential and small commercial and industrial customers, reflecting increased demand due to warmer weather than last year, as well as increased customer growth |
• | Lower operation and maintenance expense of $600,000 (after tax), primarily decreased benefit-related costs, partially offset by increased contract services at certain of the Company's electric generation stations |
• | Higher other income of $500,000 (after tax), largely higher allowance for funds used during construction |
• | Higher retail sales volumes of 3 percent, primarily to small commercial and industrial and residential customers, as previously discussed, offset in part by decreased volumes to large commercial and industrial customers |
• | Lower net interest expense of $800,000 (after tax), including higher capitalized interest |
• | Higher other income of $600,000 (after tax), as previously discussed |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
(Dollars in millions, where applicable) | ||||||||||||
Operating revenues | $ | 80.1 | $ | 92.4 | $ | 504.8 | $ | 627.5 | ||||
Operating expenses: | ||||||||||||
Purchased natural gas sold | 38.0 | 49.3 | 300.2 | 408.8 | ||||||||
Operation and maintenance | 31.8 | 34.8 | 102.9 | 102.5 | ||||||||
Depreciation, depletion and amortization | 11.4 | 11.1 | 34.0 | 33.4 | ||||||||
Taxes, other than income | 7.0 | 7.3 | 33.2 | 35.7 | ||||||||
88.2 | 102.5 | 470.3 | 580.4 | |||||||||
Operating income (loss) | (8.1 | ) | (10.1 | ) | 34.5 | 47.1 | ||||||
Earnings (loss) | $ | (8.8 | ) | $ | (11.2 | ) | $ | 10.3 | $ | 18.2 | ||
Volumes (MMdk): | ||||||||||||
Sales | 8.0 | 8.4 | 60.1 | 69.7 | ||||||||
Transportation | 30.0 | 28.0 | 94.7 | 87.7 | ||||||||
Total throughput | 38.0 | 36.4 | 154.8 | 157.4 | ||||||||
Degree days (% of normal)* | ||||||||||||
Montana-Dakota/Great Plains | 38 | % | 54 | % | 75 | % | 110 | % | ||||
Cascade | 91 | % | 78 | % | 98 | % | 104 | % | ||||
Intermountain | 51 | % | 39 | % | 92 | % | 110 | % | ||||
Average cost of natural gas, including transportation, per dk | $ | 4.73 | $ | 5.85 | $ | 4.99 | $ | 5.87 | ||||
* Degree days are a measure of the daily temperature-related demand for energy for heating. |
• | Lower earnings of $7.3 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 income taxes of $1.0 million, primarily related to the absence of a reduction of deferred income taxes associated with benefits in 2011 |
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||
(Dollars in millions) | ||||||||||||||
Operating revenues | $ | 48.3 | $ | 69.1 | $ | 141.6 | $ | 215.5 | ||||||
Operating expenses: | ||||||||||||||
Purchased natural gas sold | 10.8 | 31.8 | 35.4 | 99.8 | ||||||||||
Operation and maintenance | 19.2 | 16.6 | 34.8 | * | 52.8 | |||||||||
Depreciation, depletion and amortization | 7.3 | 6.4 | 20.4 | 19.3 | ||||||||||
Taxes, other than income | 3.5 | 3.4 | 10.5 | 10.3 | ||||||||||
40.8 | 58.2 | 101.1 | 182.2 | |||||||||||
Operating income | 7.5 | 10.9 | 40.5 | 33.3 | ||||||||||
Earnings | $ | 3.3 | $ | 5.2 | $ | 21.9 | * | $ | 16.9 | |||||
Transportation volumes (MMdk) | 34.1 | 29.4 | 103.0 | 82.5 | ||||||||||
Natural gas gathering volumes (MMdk) | 10.7 | 16.4 | 36.5 | 50.8 | ||||||||||
Customer natural gas storage balance (MMdk): | ||||||||||||||
Beginning of period | 40.4 | 31.7 | 36.0 | 58.8 | ||||||||||
Net injection (withdrawal) | 8.8 | 6.8 | 13.2 | (20.3 | ) | |||||||||
End of period | 49.2 | 38.5 | 49.2 | 38.5 | ||||||||||
* Results reflect a net benefit of $24.1 million ($15.0 million after tax) related to the natural gas gathering operations litigation, largely reflected in operation and maintenance expense, as discussed in Note 19. |
• | Lower natural gas gathering volumes from existing operations, largely resulting from customers experiencing curtailments, normal production declines, deferral of certain natural gas development activity and the Company's divestments |
• | Higher operation and maintenance expense from existing operations of $700,000 (after tax), largely due to higher payroll-related and legal costs |
• | Lower operation and maintenance expense from existing operations largely related to a $15.0 million (after tax) net benefit related to the natural gas gathering operations litigation, as discussed in Note 19, which was partially offset by an impairment of certain natural gas gathering assets of $1.7 million (after tax) due largely to low natural gas prices |
• | Higher transportation volumes of $800,000 (after tax), largely higher volumes transported to storage |
• | Lower earnings of $7.3 million (after tax) due to lower natural gas gathering volumes from existing operations, as previously discussed |
• | Lower storage services revenue of $1.0 million (after tax), largely lower average storage balances |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
(Dollars in millions, where applicable) | ||||||||||||
Operating revenues: | ||||||||||||
Oil | $ | 85.0 | $ | 74.9 | $ | 243.6 | $ | 201.9 | ||||
Natural gas | 23.5 | 45.9 | 70.6 | 135.6 | ||||||||
108.5 | 120.8 | 314.2 | 337.5 | |||||||||
Operating expenses: | ||||||||||||
Operation and maintenance: | ||||||||||||
Lease operating costs | 20.7 | 19.4 | 58.2 | 55.8 | ||||||||
Gathering and transportation | 4.3 | 6.9 | 12.8 | 18.1 | ||||||||
Other | 9.6 | 9.8 | 28.4 | 27.3 | ||||||||
Depreciation, depletion and amortization | 41.4 | 38.5 | 112.6 | 106.0 | ||||||||
Taxes, other than income: | ||||||||||||
Production and property taxes | 9.6 | 10.0 | 27.8 | 30.5 | ||||||||
Other | .2 | (.7 | ) | .8 | (.1 | ) | ||||||
Write-down of oil and natural gas properties | 160.1 | — | 160.1 | — | ||||||||
245.9 | 83.9 | 400.7 | 237.6 | |||||||||
Operating income (loss) | (137.4 | ) | 36.9 | (86.5 | ) | 99.9 | ||||||
Earnings (loss) | $ | (87.8 | ) | $ | 22.5 | $ | (56.9 | ) | $ | 60.1 | ||
Production: | ||||||||||||
Oil (MBbls) | 1,123 | 944 | 3,165 | 2,567 | ||||||||
Natural gas (MMcf) | 7,390 | 11,656 | 25,676 | 34,667 | ||||||||
Total production (MBOE) | 2,354 | 2,887 | 7,444 | 8,345 | ||||||||
Average realized prices (including hedges): | ||||||||||||
Oil (per Bbl) | $ | 75.69 | $ | 79.28 | $ | 76.96 | $ | 78.64 | ||||
Natural gas (per Mcf) | $ | 3.17 | $ | 3.94 | $ | 2.75 | $ | 3.91 | ||||
Average realized prices (excluding hedges): | ||||||||||||
Oil (per Bbl) | $ | 73.89 | $ | 80.90 | $ | 76.45 | $ | 83.05 | ||||
Natural gas (per Mcf) | $ | 2.25 | $ | 3.44 | $ | 1.88 | $ | 3.44 | ||||
Average depreciation, depletion and amortization rate, per BOE | $ | 16.85 | $ | 12.72 | $ | 14.44 | $ | 12.09 | ||||
Production costs, including taxes, per BOE: | ||||||||||||
Lease operating costs | $ | 8.77 | $ | 6.71 | $ | 7.81 | $ | 6.68 | ||||
Gathering and transportation | 1.84 | 2.37 | 1.72 | 2.17 | ||||||||
Production and property taxes | 4.07 | 3.46 | 3.74 | 3.66 | ||||||||
$ | 14.68 | $ | 12.54 | $ | 13.27 | $ | 12.51 |
• | A noncash write-down of oil and natural gas properties of $100.9 million (after tax), as discussed in Note 5 |
• | Decreased natural gas production of 37 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 natural gas prices of 20 percent |
• | Lower average realized oil prices of 5 percent |
• | Higher depreciation, depletion and amortization expense of $1.9 million (after tax), due to higher depletion rates, partially offset by lower volumes |
• | Increased oil production of 19 percent, largely related to drilling activity in the Bakken area, as well as the Paradox Basin |
• | Lower gathering and transportation expense of $1.6 million (after tax), largely due to lower gathering costs resulting from lower volumes and lower gathering rates in the coalbed area |
• | A noncash write-down of oil and natural gas properties of $100.9 million (after tax), as discussed in Note 5 |
• | Lower average realized natural gas prices of 30 percent |
• | Decreased natural gas production of 26 percent, as previously discussed |
• | Higher depreciation, depletion and amortization expense of $4.2 million (after tax), as previously discussed |
• | Lower average realized oil prices of 2 percent |
• | Increased lease operating expenses of $1.5 million (after tax), largely due to higher costs in the Bakken area resulting largely from increased production volumes and higher workover costs, partially offset by lower costs at certain natural gas properties where curtailments of production have occured |
• | Higher general and administrative expense of $1.3 million (after tax), largely due to higher payroll-related costs |
• | Increased oil production of 23 percent, largely related to drilling activity in the Bakken area, the Paradox Basin, as well as at the South Texas properties |
• | Lower gathering and transportation expense of $3.3 million (after tax), as previously discussed |
• | Lower production taxes of $1.6 million (after tax), largely resulting from lower revenues excluding hedges |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
(Dollars in millions) | ||||||||||||
Operating revenues | $ | 650.0 | $ | 619.1 | $ | 1,241.5 | $ | 1,138.2 | ||||
Operating expenses: | ||||||||||||
Operation and maintenance | 549.6 | 530.7 | 1,103.3 | 1,011.8 | ||||||||
Depreciation, depletion and amortization | 20.3 | 21.6 | 59.9 | 64.2 | ||||||||
Taxes, other than income | 11.0 | 11.1 | 29.6 | 28.6 | ||||||||
580.9 | 563.4 | 1,192.8 | 1,104.6 | |||||||||
Operating income | 69.1 | 55.7 | 48.7 | 33.6 | ||||||||
Earnings | $ | 41.9 | $ | 33.1 | $ | 24.7 | $ | 16.7 | ||||
Sales (000's): | ||||||||||||
Aggregates (tons) | 9,009 | 9,196 | 17,983 | 18,502 | ||||||||
Asphalt (tons) | 3,013 | 3,462 | 4,874 | 5,469 | ||||||||
Ready-mixed concrete (cubic yards) | 1,105 | 986 | 2,410 | 2,081 |
• | Increased construction margins of $4.1 million (after tax) reflecting increased construction activity and margins in the South and North Central regions |
• | Higher earnings of $2.3 million (after tax) resulting from higher liquid asphalt oil margins and volumes |
• | Lower selling, general and administrative expense of $2.3 million (after tax), largely lower payroll and benefit-related costs |
• | Higher earnings of $1.5 million (after tax) resulting from higher ready-mixed concrete volumes and margins |
• | Lower earnings of $800,000 (after tax) resulting from lower aggregate margins primarily due to higher costs, as well as lower volumes |
• | Lower gains of $700,000 (after tax) from the sale of property, plant and equipment |
• | Increased construction margins of $8.3 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 expense of $3.6 million (after tax), as previously discussed |
• | Higher earnings of $3.0 million (after tax) resulting from higher ready-mixed concrete volumes and margins, largely in the North Central region |
• | Higher earnings of $2.9 million (after tax) resulting from higher liquid asphalt oil margins and volumes |
• | Higher income taxes, including 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 $3.5 million (after tax) resulting from lower asphalt margins primarily due to higher costs, as well as lower volumes |
• | Lower earnings of $3.3 million (after tax) resulting from lower aggregate margins and volumes, as previously discussed |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
(In millions) | ||||||||||||
Operating revenues | $ | 247.2 | $ | 226.2 | $ | 689.4 | $ | 627.6 | ||||
Operating expenses: | ||||||||||||
Operation and maintenance | 219.9 | 208.0 | 606.5 | 571.2 | ||||||||
Depreciation, depletion and amortization | 2.8 | 2.8 | 8.3 | 8.5 | ||||||||
Taxes, other than income | 7.2 | 5.8 | 22.1 | 19.0 | ||||||||
229.9 | 216.6 | 636.9 | 598.7 | |||||||||
Operating income | 17.3 | 9.6 | 52.5 | 28.9 | ||||||||
Earnings | $ | 9.9 | $ | 5.1 | $ | 30.0 | $ | 15.8 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
(In millions) | ||||||||||||
Other: | ||||||||||||
Operating revenues | $ | 2.3 | $ | 2.6 | $ | 7.0 | $ | 7.9 | ||||
Operation and maintenance | 1.5 | 1.6 | 4.4 | 6.5 | ||||||||
Depreciation, depletion and amortization | .5 | .4 | 1.5 | 1.2 | ||||||||
Taxes, other than income | — | .1 | .1 | .1 | ||||||||
Intersegment transactions: | ||||||||||||
Operating revenues | $ | 26.4 | $ | 39.9 | $ | 78.6 | $ | 139.3 | ||||
Purchased natural gas sold | 13.6 | 31.0 | 56.5 | 112.3 | ||||||||
Operation and maintenance | 12.8 | 8.9 | 22.1 | 27.0 |
• | Earnings per common share for 2012 are projected in the range of $1.05 to $1.20, excluding a third quarter noncash write-down of $100.9 million after tax and a second quarter $15.0 million after-tax benefit from a reversal of an arbitration charge. Including these items, earnings guidance for 2012 is 60 cents to 75 cents per common share. |
• | 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 to 10 percent. |
• | The Company continually seeks opportunities to expand through strategic acquisitions and organic growth opportunities. |
• | The Company filed an application with the MTPSC on September 26, 2012, for a natural gas rate increase, as discussed in Note 18. |
• | 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 Company's share of the cost for the installation is estimated at $125 million and is expected to be completed in 2015. Advance determination of prudence for recovery of costs related to this system in electric rates charged to customers has been approved by the NDPSC. |
• | The Company plans to construct and operate an 88-MW simple-cycle natural gas turbine and associated facilities, with an estimated project cost of $85 million and a projected in-service date late 2014. It will be located on owned property that is adjacent to the Company's Heskett Generating Station near Mandan, North Dakota. The capacity is necessary to meet the requirements of the Company's integrated electric system customers and will be a partial replacement for third-party contract capacity expiring in 2015. Advance determination of prudence and a Certificate of Public Convenience and Necessity have been received from the NDPSC. |
• | 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 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 in 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 is pursuing opportunities associated with the potential development of high-voltage transmission lines and system enhancements targeted toward delivery of energy to major market areas. |
• | On October 10, 2012, the Company entered into a new coal supply agreement that will replace the Coyote coal supply agreement that expires in May 2016, as reported in Items 1 and 2 - Business and Properties - General in the 2011 Annual Report. The new agreement provides for the purchase of coal necessary to supply the coal requirements of the Coyote Station for the period May 2016 through December 2040. |
• | On August 16, 2012, Cascade filed an application for a decoupling mechanism with the OPUC. The OPUC approved an extension until March 31, 2013, of Cascade's existing decoupling mechanism, which was scheduled to expire in the third quarter of 2012, as reported in Items 1 and 2 - Business and Properties - General in the 2011 Annual Report. |
• | The Company along with Calumet Refining, LLC, continues to explore the feasibility of 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. Options to purchase land for the plant site were recently exercised. Total project costs are estimated to be approximately $280 million to $300 million with a projected in-service date in 2014. |
• | In May 2012, the Company purchased a 50 percent undivided interest in Whiting Oil and Gas Corporation's Pronghorn natural gas and oil midstream assets near Belfield, North Dakota in the Bakken area. The Company expects to invest approximately $100 million in 2012 including the purchase price. The Belfield natural gas processing plant has an inlet processing capacity of 35 MMcf per day. |
• | The Company expects average natural gas storage balances for the remainder of the year to be slightly higher than 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. |
• | In August 2012, the Company placed in service approximately 13 miles of high-pressure transmission pipeline from the Stateline processing facilities in northwestern North Dakota to deliver gas into the Northern Border Pipeline. |
• | 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. |
• | The Company has increased its expected capital expenditures to approximately $525 million in 2012. The Company has improved efficiencies across its portfolio to reduce individual well costs. However, an increase in the number of total planned wells for the year as well as the drilling of higher WI wells has resulted in higher total projected capital expenditures for the year. 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 expects a 25 to 30 percent increase in oil production and a 25 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 seven drilling rigs deployed on its acreage in the Bakken, Texas and Paradox areas. |
• | Bakken Area |
◦ | The Company owns a total of approximately 127,000 net acres of leaseholds in Mountrail, Stark and Richland counties. |
◦ | Capital expenditures are now expected to total approximately $265 million this year; an expansion of $165 million compared to 2011. The increase in the Bakken projected capital expenditures from earlier this year relates to more operated wells being drilled in 2012 along with the drilling of higher WI wells. |
◦ | Mountrail County, North Dakota |
▪ | The Company has had strong recent well results in the area. The Amundson 23-14H (15 percent WI) came on production October 16, 2012, with a 24-hour IP rate of 1,353 Bbls of oil and 582 Mcf of natural gas and the Luke 19-20-29H (58 percent WI) began producing October 18, 2012, at a 24-hour IP rate of 968 Bbls and 678 Mcf. |
▪ | 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 600,000 Bbls. |
◦ | Stark County, North Dakota |
▪ | The Company has had strong recent well results in the Pavlish 19-20H (71 percent WI) and Kudrna 5-8H (81 percent WI) with 24-hour IP rates of 1,097 Bbls of oil and 657 Mcf of natural gas, and 1,151 Bbls of oil and 571 Mcf, respectively. The Pavlish came on production on September 19, 2012, and the Kudrna September 20, 2012. |
▪ | Based on current information and assuming 1,280-acre spacing, the Company has identified approximately 40 future drill sites. Estimated gross ultimate recovery rates per well are 200,000 to 400,000 Bbls. |
◦ | Richland County, Montana |
▪ | On September 30, 2012, the Company brought the Klose (66 percent WI) well on line with a 24-hour IP rate of 371 Bbls of oil and 82 Mcf of natural gas. |
▪ | Approximately 100 potential gross well sites have been identified. Estimated gross ultimate recovery rates per well are 250,000 to 500,000 Bbls. |
◦ | Paradox Basin - Cane Creek Federal Unit, Utah |
▪ | The Company holds approximately 75,000 net exploratory leasehold acres. |
▪ | The drilling of six operated wells is planned for this year with approximately $45 million of capital expenditures. |
▪ | The Company has experienced strong well results with the Cane Creek 12-1 (100 percent WI) consistently producing approximately 1,500 BOPD excluding natural gas over the past three weeks with consistently high flowing pressures. |
▪ | Approximately 50 to 75 future net locations have been identified. Estimated gross ultimate recovery rates per well range from 250,000 to 1 million Bbls. |
◦ | Texas |
▪ | The Company is targeting areas that have the potential for higher liquids content with approximately $65 million of capital planned for this year. |
▪ | 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 spend approximately $40 million this year. |
▪ | Two recently completed wells have had IP rates in excess of 200 Bbls per day. Production optimization efforts continue in the Heath with ongoing cleanouts of the horizontal laterals and paraffin treatment to assure sustainable production from the field. |
◦ | Sioux County, Nebraska |
▪ | The Company has entered into an exploration agreement where it will drill two vertical wells and one horizontal well. The vertical wells in the project have been drilled and are undergoing selective well testing. The horizontal well is planned for the first half of next year. After evaluating these initial wells, the Company may exercise an option to purchase a 65 percent WI in approximately 79,000 gross acres. |
◦ | Other Opportunities |
▪ | The Company has spent approximately $25 million in the Niobrara area where the economic viability and other horizons are currently being evaluated. |
▪ | The remaining forecasted 2012 capital has been allocated to other operated and non-operated opportunities, including $25 million for acquisitions of leaseholds acquired earlier this year primarily in the Bakken, Richland County area. |
• | Earnings guidance reflects estimated average NYMEX index prices for November and December in the ranges of $90.00 to $95.00 per Bbl of crude oil and $3.00 to $3.50 per Mcf of natural gas. Estimated prices do not reflect potential basis differentials. |
• | For the last three months of 2012, the Company has hedged 8,000 BOPD utilizing swaps and costless collars at a weighted average price of $101.34 and $81.25/$95.88 (floor/ceiling) respectively, and 49,500 MMBtu of natural gas per day utilizing swaps at a weighted average price of $4.38. |
• | For 2013, the Company has hedged 7,000 BOPD utilizing swaps and costless collars with a weighted average price of $99.83 and $92.50/$107.03 (floor/ceiling) respectively, and 30,000 MMBtu of natural gas per day utilizing swaps at a weighted average price of $3.89. |
• | The hedges that are in place as of October 31, 2012, are summarized in the following chart: |
Commodity | Type | Index | Period Outstanding | Forward Notional Volume (Bbl/MMBtu) | Price (Per Bbl/MMBtu) | |||
Crude Oil | Collar | NYMEX | 10/12 - 12/12 | 92,000 | $80.00-$87.80 | |||
Crude Oil | Collar | NYMEX | 10/12 - 12/12 | 92,000 | $80.00-$94.50 | |||
Crude Oil | Collar | NYMEX | 10/12 - 12/12 | 92,000 | $80.00-$98.36 | |||
Crude Oil | Collar | NYMEX | 10/12 - 12/12 | 46,000 | $85.00-$102.75 | |||
Crude Oil | Collar | NYMEX | 10/12 - 12/12 | 46,000 | $85.00-$103.00 | |||
Crude Oil | Swap | NYMEX | 10/12 - 12/12 | 46,000 | $100.10 | |||
Crude Oil | Swap | NYMEX | 10/12 - 12/12 | 46,000 | $100.00 | |||
Crude Oil | Swap | NYMEX | 10/12 - 12/12 | 92,000 | $110.30 | |||
Crude Oil | Swap | NYMEX | 10/12 - 12/12 | 92,000 | $96.00 | |||
Crude Oil | Swap | NYMEX | 10/12 - 12/12 | 92,000 | $99.00 | |||
Natural Gas | Swap | NYMEX | 10/12 - 12/12 | 874,000 | $6.27 | |||
Natural Gas | Swap | NYMEX | 10/12 - 12/12 | 460,000 | $5.005 | |||
Natural Gas | Swap | NYMEX | 10/12 - 12/12 | 230,000 | $5.005 | |||
Natural Gas | Swap | NYMEX | 10/12 - 12/12 | 230,000 | $5.0125 | |||
Natural Gas | Swap | NYMEX | 10/12 - 12/12 | 920,000 | $3.05 | |||
Natural Gas | Swap | NYMEX | 10/12 - 12/12 | 920,000 | $2.805 | |||
Natural Gas | Swap | Ventura | 10/12 - 12/12 | 920,000 | $4.87 | |||
Crude Oil | Collar | NYMEX | 1/13 - 12/13 | 182,500 | $95.00-$117.00 | |||
Crude Oil | Collar | NYMEX | 1/13 - 12/13 | 182,500 | $95.00-$117.00 | |||
Crude Oil | Collar | NYMEX | 1/13 - 12/13 | 365,000 | $90.00-$97.05 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $95.00 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $95.30 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $100.00 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $100.02 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $102.00 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $102.00 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $104.00 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $104.00 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $98.00 | |||
Crude Oil | Swap | NYMEX | 1/13 - 12/13 | 182,500 | $98.00 | |||
Natural Gas | Swap | NYMEX | 1/13 - 12/13 | 3,650,000 | $3.76 | |||
Natural Gas | Swap | NYMEX | 1/13 - 12/13 | 3,650,000 | $3.90 | |||
Natural Gas | Swap | NYMEX | 1/13 - 12/13 | 3,650,000 | $4.00 | |||
Natural Gas | Basis Swap | CIG | 10/12 - 12/12 | 690,000 | $0.405 | |||
Natural Gas | Basis Swap | CIG | 10/12 - 12/12 | 184,000 | $0.41 | |||
Notes: • 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. • For all basis swaps, index prices are below NYMEX prices and are reported as a positive amount in the price column. |
• | Work backlog as of September 30, 2012, was approximately $464 million, compared to approximately $448 million a year ago. Private work represents 17 percent of the backlog, up from 8 percent in the second quarter. Public work represents 83 percent of the backlog. 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 $49 million. |
• | Projected revenues included in the Company's 2012 earnings guidance are approximately $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 fifth 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 September 30, 2012, was approximately $370 million, compared to approximately $331 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 $1 million. |
• | Projected revenues included in the Company's 2012 earnings guidance are approximately $900 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 16 |
• | 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 |
Company | Facility | Facility Limit | Amount Outstanding | Letters of Credit | Expiration Date | ||||||||||||
(In millions) | |||||||||||||||||
MDU Resources Group, Inc. | Commercial paper/Revolving credit agreement | (a) | $ | 100.0 | $ | 50.0 | (b) | $ | — | 5/26/15 | |||||||
Cascade Natural Gas Corporation | Revolving credit agreement | $ | 50.0 | (c) | $ | — | $ | 1.9 | (d) | 12/27/13 | (e) | ||||||
Intermountain Gas Company | Revolving credit agreement | $ | 65.0 | (f) | $ | 11.0 | $ | — | 8/11/13 | ||||||||
Centennial Energy Holdings, Inc. | Commercial paper/Revolving credit agreement | (g) | $ | 500.0 | $ | 350.5 | (b) | $ | 20.2 | (d) | 6/8/17 | ||||||
(a) The $125 million commercial paper program is supported by a revolving credit agreement with various banks totaling $100 million (provisions allow for increased borrowings, at the option of the Company on stated conditions, up to a maximum of $150 million). There were no amounts outstanding under the credit agreement. On October 4, 2012, the credit agreement was increased to $125 million and the expiration date was extended to October 4, 2017. (b) Amount outstanding under commercial paper program. (c) Certain provisions allow for increased borrowings, up to a maximum of $75 million. (d) The outstanding letters of credit, as discussed in Note 19, reduce amounts available under the credit agreement. (e) Effective June 27, 2012, Cascade extended the credit agreement. (f) Certain provisions allow for increased borrowings, up to a maximum of $80 million. (g) The $500 million commercial paper program is supported by a revolving credit agreement with various banks totaling $500 million (provisions allow for increased borrowings, at the option of Centennial on stated conditions, up to a maximum of $650 million). There were no amounts outstanding under the credit agreement. |
(Forward notional volume and fair value in thousands) | |||||||||
Weighted Average Fixed Price (Per Bbl/MMBtu) | Forward Notional Volume (Bbl/MMBtu) | Fair Value | |||||||
Fidelity | |||||||||
Oil swap agreements maturing in 2012 | $ | 101.34 | 368 | $ | 3,164 | ||||
Oil swap agreements maturing in 2013 | $ | 99.83 | 1,825 | $ | 11,157 | ||||
Natural gas swap agreements maturing in 2012 | $ | 4.38 | 4,554 | $ | 4,806 | ||||
Natural gas swap agreement maturing in 2013 | $ | 3.76 | 3,650 | $ | (307 | ) | |||
Natural gas basis swap agreements maturing in 2012 | $ | .41 | 874 | $ | (174 | ) | |||
Cascade | |||||||||
Natural gas swap agreement maturing in 2012 | $ | 4.47 | 31 | $ | (53 | ) | |||
Weighted Average Floor/Ceiling Price (Per Bbl) | Forward Notional Volume (Bbl) | Fair Value | |||||||
Fidelity | |||||||||
Oil collar agreements maturing in 2012 | $81.25/$95.88 | 368 | $ | (843 | ) | ||||
Oil collar agreements maturing in 2013 | $92.50/$107.03 | 730 | $ | 2,814 |
(Notional amount and fair value in thousands) | ||||||||
Weighted Average Fixed Interest Rate | Notional Amount | Fair Value | ||||||
Centennial | ||||||||
Interest rate swap agreement with mandatory termination date in 2012 | 3.15 | % | $ | 10,000 | $ | (1,343 | ) | |
Interest rate swap agreements with mandatory termination dates in 2013 | 3.22 | % | $ | 50,000 | $ | (6,436 | ) |
MDU RESOURCES GROUP, INC. | |||
DATE: | November 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. | ||
3 | Company Bylaws, as amended and restated, on August 16, 2012 | |
4 | First Amendment to Credit Agreement, dated October 4, 2012, among MDU Resources Group, Inc., Various Lenders, and Wells Fargo Bank, National Association, as Administrative Agent | |
+10(a) | Instrument of Amendment to the MDU Resources Group, Inc. 401(k) Retirement Plan, dated August 29, 2012 | |
+10(b) | Instrument of Amendment to the MDU Resources Group, Inc. 401(k) Retirement Plan, dated August 29, 2012 | |
+10(c) | Form of Agreement for Termination of Change of Control Employment Agreement, effective November 1, 2012, by and between MDU Resources Group, Inc. and William E. Schneider, John G. Harp, Steven L. Bietz, David L. Goodin, William R. Connors, Mark A. Del Vecchio, Nicole A. Kivisto, Cynthia J. Norland, Paul K. Sandness, Doran N. Schwartz and John P. Stumpf | |
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 September 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 |
Bylaws of | ||
MDU RESOURCES | ||
GROUP, INC. |
Page No. | ||||
OFFICES | 1 | |||
1.01 Registered Office | 1 | |||
1.02 Other Offices | 1 | |||
MEETINGS OF STOCKHOLDERS | 1 | |||
2.01 Place of Meetings | 1 | |||
2.02 Annual Meetings | 1 | |||
2.03 Notice of Annual Meeting | 2 | |||
2.04 Stockholders List | 2 | |||
2.05 Notice of Special Meeting | 2 | |||
2.06 Quorum | 2 | |||
2.07 Voting Rights | 3 | |||
2.08 Nominations for Director | 3 | |||
2.09 Business at Meetings of Stockholders | 6 | |||
DIRECTORS | 8 | |||
3.01 Authority of Directors | 8 | |||
3.02 Qualifications | 8 | |||
3.03 Place of Meetings | 9 | |||
3.04 Annual Meetings | 9 | |||
3.05 Regular Meetings | 9 | |||
3.06 Special Meetings | 9 | |||
3.07 Quorum | 9 | |||
3.08 Participation of Directors by Conference Telephone | 9 | |||
3.09 Written Action of Directors | 9 | |||
3.10 Committees | 10 | |||
3.11 Reports of Committees | 10 | |||
3.12 Compensation of Directors | 10 | |||
3.13 Chairman of the Board | 10 | |||
NOTICES | 11 | |||
4.01 Notices | 11 | |||
4.02 Waiver | 11 | |||
OFFICERS | 11 | |||
5.01 Election, Qualifications | 11 | |||
5.02 Additional Officers | 11 | |||
5.03 Salaries | 11 | |||
5.04 Term | 12 | |||
5.05 Chief Executive Officer | 12 |
5.06 The President | 12 | ||
5.07 The Vice Presidents | 12 | ||
5.08 The Secretary and Assistant Secretaries | 12 | ||
5.09 Treasurer and Assistant Treasurers | 12 | ||
5.10 General Counsel | 13 | ||
5.11 Authority and Duties | 13 | ||
5.12 Execution of Instruments | 13 | ||
5.13 Execution of Proxies | 14 | ||
CERTIFICATES OF STOCK | 14 | ||
6.01 Certificates | 14 | ||
6.02 Signatures | 14 | ||
6.03 Special Designation on Certificates | 14 | ||
6.04 Lost Certificates | 15 | ||
6.05 Transfers of Stock | 15 | ||
6.06 Record Date | 15 | ||
6.07 Registered Stockholders | 15 | ||
GENERAL PROVISIONS | 15 | ||
7.01 Dividends | 15 | ||
7.02 Checks | 16 | ||
7.03 Fiscal Year | 16 | ||
7.04 Seal | 16 | ||
7.05 Inspection of Books and Records | 16 | ||
7.06 Amendments | 16 | ||
7.07 Indemnification of Officers, Directors, Employees and Agents | 16 | ||
7.08 Severability | 18 |
MDU RESOURCES GROUP, INC. | ||
By | /s/ Doran N. Schwartz | |
Doran N. Schwartz | ||
Vice President and Chief Financial Officer |
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and as a Lender | ||
By | /s/ Keith Luettel | |
Name: | Keith Luettel | |
Title: | Vice President |
UNION BANK, N.A. | ||
By | /s/ Bryan Read | |
Name: | Bryan Read | |
Title: | Vice President |
PNC BANK, NATIONAL ASSOCIATION | ||
By | /s/ Michael Leong | |
Name: | Michael Leong | |
Title: | Senior Vice President |
U.S. BANK NATIONAL ASSOCIATION | ||
By | /s/ John Prigge | |
Name: | John Prigge | |
Title: | Vice President |
Name | Revolving Commitment | Notice Address |
MDU Resources Group, Inc. | N/A | 1200 West Century Avenue Bismarck, ND 58503 Attention: Doug Mahowald, Treasurer Telecopier: 701-530-1734 E-Mail: Doug.Mahowald@MDUResources.com |
Wells Fargo Bank, National Association, as Administrative Agent | N/A | 1525 W WT Harris Boulevard Mail Code: D1109-019 Attention: Syndication Agency Services Charlotte, NC 28262 Telecopier: 704-590-2790 E-Mail: agencyservices.requests@wellsfargo.com with a copy to: MAC N9305-070 90 South Seventh Street Minneapolis, MN 55402 Attention: Keith Luettel Telecopier: 612-667-4747 E-Mail: keith.r.luettel@wellsfargo.com |
Wells Fargo Bank, National Association, as a Lender | $35,000,000 | MAC N9305-070 90 South Seventh Street Minneapolis, MN 55402 Attention: Keith Luettel Telecopier: 612-667-4747 E-Mail: keith.r.luettel@wellsfargo.com |
Union Bank, N.A. | $35,000,000 | 445 S. Figueroa Street, 15th Floor Los Angeles, CA 90071 Attention: Kevin Zitar Telecopier: 213-236-4096 E-Mail: kevin.zitar@unionbank.com |
PNC Bank, National Association | $27,500,000 | One North Franklin, 28th Floor Chicago, IL 60606 Attention: Michael Cortese Telecopier: 312-338-8128 E-Mail: Michael.Cortese@pnc.com |
U.S. Bank National Association | $27,500,000 | 800 Nicollet Mall Minneapolis, MN 55402 Attention: John Prigge Telecopier: 612-303-2265 E-Mail: John.prigge@usbank.com |
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. | BMH Mechanical Holdings, LLC, a Nevada limited liability company, 100% |
8. | Bombard Electric, LLC, a Nevada limited liability company, 100% |
9. | Bombard Mechanical, LLC, a Nevada limited liability company, 100% |
10. | Capital Electric Construction Company, Inc., a Kansas corporation, 100% |
11. | Capital Electric Line Builders, Inc., a Kansas corporation, 100% |
12. | Cascade Natural Gas Corporation, a Washington corporation, 100% |
13. | Centennial Energy Holdings, Inc., a Delaware corporation, 100% |
14. | Centennial Energy Resources International, Inc., a Delaware corporation, 100% |
15. | Centennial Energy Resources LLC, a Delaware limited liability company, 100% |
16. | Centennial Holdings Capital LLC, a Delaware limited liability company, 100% |
17. | Central Oregon Redi-Mix, L.L.C., an Oregon limited liability company, 78% |
18. | CGC Resources, Inc., a Washington corporation, 100% |
19. | Concrete, Inc., a California corporation, 100% |
20. | Connolly-Pacific Co., a California corporation, 100% |
21. | Continental Line Builders, Inc., a Delaware corporation, 100% |
22. | Coordinating and Planning Services, Inc., a Delaware corporation, 100% |
23. | Desert Fire Holdings, Inc., a Nevada corporation, 100% |
24. | Desert Fire Protection, a Nevada Limited Partnership, 100% |
25. | Desert Fire Protection, Inc., a Nevada corporation, 100% |
26. | Desert Fire Protection, LLC, a Nevada limited liability company, 100% |
27. | D S S Company, a California corporation, 100% |
28. | E.S.I., Inc., an Ohio corporation, 100% |
29. | Fairbanks Materials, Inc., an Alaska corporation, 100% |
30. | Fidelity Exploration & Production Company, a Delaware corporation, 100% |
31. | Fidelity Oil Co., a Delaware corporation, 100% |
32. | Frebco, Inc., an Ohio corporation, 100% |
33. | FutureSource Capital Corp., a Delaware corporation, 100% |
34. | Granite City Ready Mix, Inc., a Minnesota corporation, 100% |
35. | Hamlin Electric Company, a Colorado corporation, 100% |
36. | Harp Engineering, Inc., a Montana corporation, 100% |
37. | Hawaiian Cement, a Hawaii partnership, 100% |
38. | ILB Hawaii, Inc., a Hawaii corporation, 100% |
39. | Independent Fire Fabricators, LLC, a Nevada limited liability company, 100% |
40. | Intermountain Gas Company, an Idaho corporation, 100% |
41. | International Line Builders, Inc., a Delaware corporation, 100% |
42. | InterSource Insurance Company, a Vermont corporation, 100% |
43. | Jebro Incorporated, an Iowa corporation, 100% |
44. | JTL Group, Inc., a Montana corporation, 100% |
45. | JTL Group, Inc., a Wyoming corporation, 100% |
46. | Kent’s Oil Service, a California corporation, 100% |
47. | Knife River Corporation, a Delaware corporation, 100% |
48. | Knife River Corporation – North Central, a Minnesota corporation, 100% |
49. | Knife River Corporation – Northwest, an Oregon corporation, 100% |
50. | Knife River Corporation – South, a Texas corporation, 100% |
51. | Knife River Dakota, Inc., a Delaware corporation, 100% |
52. | Knife River Equipment, Inc., a Delaware corporation, 100% |
53. | Knife River Hawaii, Inc., a Delaware corporation, 100% |
54. | Knife River Marine, Inc., a Delaware corporation, 100% |
55. | Knife River Midwest, LLC, a Delaware limited liability company, 100% |
56. | KRC Holdings, Inc., a Delaware corporation, 100% |
57. | LME&U Holdings, LLC, a Nevada limited liability company, 100% |
58. | Lone Mountain Excavation & Utilities, LLC, a Nevada limited liability company, 100% |
59. | Loy Clark Pipeline Co., an Oregon corporation, 100% |
60. | LTM, Incorporated, an Oregon corporation, 100% |
61. | MDU Brasil Ltda., a Brazil limited liability company, 100% |
62. | MDU Construction Services Group, Inc., a Delaware corporation, 100% |
63. | MDU Energy Capital, LLC, a Delaware limited liability company, 100% |
64. | MDU Industrial Services, Inc., a Delaware corporation, 100% |
65. | MDU Resources International LLC, a Delaware limited liability company, 100% |
66. | MDU Resources Luxembourg I LLC S.a.r.l., a Luxembourg limited liability company, 100% |
67. | MDU Resources Luxembourg II LLC S.a.r.l., a Luxembourg limited liability company, 100% |
68. | Midland Technical Crafts, Inc., a Delaware corporation, 100% |
69. | Netricity LLC, an Alaska limited liability company, 75% |
70. | Nevada Solar Solutions, LLC, a Delaware limited liability company, 100% |
71. | Nevada Solar Solutions II, LLC, a Delaware limited liability company, 100% |
72. | Northstar Materials, Inc., a Minnesota corporation, 100% |
73. | Oregon Electric Construction, Inc., an Oregon corporation, 100% |
74. | Pouk & Steinle, Inc., a California corporation, 100% |
75. | Prairie Cascade Energy Holdings, LLC, a Delaware limited liability company, 100% |
76. | Prairie Intermountain Energy Holdings, LLC, a Delaware limited liability company, 100% |
77. | Prairielands Energy Marketing, Inc., a Delaware corporation, 100% |
78. | Prairielands Magnetics Limited, a Scotland private limited company, 100% |
79. | Rocky Mountain Contractors, Inc., a Montana corporation, 100% |
80. | USI Industrial Services, Inc., a Delaware corporation, 100% |
81. | The Wagner Group, Inc., a Delaware corporation, 100% |
82. | Wagner Industrial Electric, Inc., a Delaware corporation, 100% |
83. | The Wagner-Smith Company, an Ohio corporation, 100% |
84. | Wagner-Smith Equipment Co., a Delaware corporation, 100% |
85. | Wagner-Smith Pumps & Systems, Inc., an Ohio corporation, 100% |
86. | Warner Enterprises, Inc., a Nevada corporation, 100% |
87. | WBI Canadian Pipeline, Ltd., a Canadian corporation, 100% |
88. | WBI Energy, Inc., a Delaware corporation, 100% |
89. | WBI Energy Midstream, LLC, a Colorado limited liability company, 100% |
90. | WBI Energy Services, Inc., a Delaware corporation, 100% |
91. | WBI Energy Transmission, Inc., a Delaware corporation, 100% |
92. | WBI Holdings, Inc., a Delaware corporation, 100% |
93. | WHC, Ltd., a Hawaii corporation, 100% |
1. | Effective as of May 1, 2012, by adding WBI Energy, Inc. (“WBIE”) as a Participating Affiliate and to 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. |
2. | By removing WBI Holdings, Inc. (“WBIH”) as a Participating Affiliate and from 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. |
3. | By further modifying the table and footnotes 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 to reflect the name changes of Bitter Creek Pipelines, LLC and its division Total Corrosion Solutions to WBI Energy Midstream, LLC and WBI Energy Corrosion Services, respectively; and Williston Basin Interstate Pipeline Company to WBI Energy Transmission, Inc. |
4. | By modifying the table and footnote in 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 to reflect the name change of Bitter Creek Pipelines, LLC to WBI Energy Midstream, LLC. |
5. | By removing Knife River – Western North Dakota Division, a Division of Knife River Corporation – North Central (“KR-WND”) as a Participating Affiliate and from 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. |
6. | By adding the following paragraph to the end of Section D-3-3 Amount of Profit Sharing Contributions, Allocation of Supplement D-3, Provisions Relating to the Profit Sharing Feature for Certain Participating Affiliates: |
7. | By adding WBIE as a Participating Affiliate, removing WBIH as a Participating Affiliate, and changing Williston Basin Interstate Pipeline Company to WBI Energy Transmission, Inc. in Section D‑6‑2 Eligibility to Share in the Retirement Contribution of Supplement D-6, Provisions Relating to the MDU Group Inc. Retirement Contribution Feature. |
8. | By replacing the following entry in Schedule B, in its entirety: |
MDU RESOURCES GROUP, INC. | |||
EMPLOYEE BENEFITS COMMITTEE | |||
By: | /s/ Doran N. Schwartz | ||
Doran N. Schwartz, Chairman |
1. | By replacing 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: |
D-6A-2 | Eligibility to Share in the Retirement Contribution. Participation in the Retirement Contribution for any Plan Year is limited to individuals who were active Participants in a Company Pension Plan as of December 31, 2009. Notwithstanding the foregoing, active Participants in the MDU Resources Group, Inc. Pension Plan for Collective Bargaining Unit Employees as of June 30, 2011, shall be eligible to participate in this Retirement Contribution Feature, effective July 1, 2011. Furthermore, active participants in the Retirement Plan for Employees of Cascade Natural Gas Corporation, who are covered by a collective bargaining agreement that provides for participation in such plan as of September 30, 2012, shall be eligible to participate in this Retirement Contribution Feature, effective January 1, 2013. |
2. | By replacing Section D‑6A‑3 Amount of Retirement Contribution of Supplement D-6A, Provisions Relating to the Retirement Contribution Feature, in its entirety, with the following: |
D-6A-3 | Amount of Retirement Contribution. For each Plan Year, Supplement D-6A Participants eligible to participate in this feature on January 1, 2010, will be credited with the following static contribution based upon |
Age as of December 31, 2009/ June 30, 2011/ December 31, 2012 | Retirement Contribution Percentage |
Less than 30 | 5.0% |
30 but less than 35 | 7.0% |
35 but less than 40 | 9.0% |
40 but less than 45 | 10.5% |
45 and over | 11.5% |
MDU RESOURCES GROUP, INC. | |||
EMPLOYEE BENEFITS COMMITTEE | |||
By: | /s/ Doran N. Schwartz | ||
Doran N. Schwartz, Chairman |
1. | The Parties agree that any provisions in the Agreement regarding notice are hereby waived by the Parties. |
2. | The Parties agree that the Agreement is hereby terminated at 8:00 a.m. Central Time on November 1, 2012 ("Effective Date"). |
3. | The termination of the Agreement on the agreed Effective Date shall not affect any of the rights or obligations of the Parties to the Agreement occurring prior to the Effective Date. |
4. | Acknowledgement and agreement to termination is evidenced by the Parties’ signatures below. |
Twelve Months Ended September 30, 2012 | Year Ended December 31, 2011 | |||||||||
(In thousands of dollars) | ||||||||||
Earnings Available for Fixed Charges: | ||||||||||
Net Income (a) | $ | 126,682 | $ | 223,842 | ||||||
Income Taxes | 61,156 | 110,273 | ||||||||
187,838 | 334,115 | |||||||||
Rents (b) | 13,838 | 13,568 | ||||||||
Interest (c) | 82,979 | 86,505 | ||||||||
Total Earnings Available for Fixed Charges | $ | 284,655 | $ | 434,188 | ||||||
Preferred Dividend Requirements | $ | 685 | $ | 685 | ||||||
Ratio of Income Before Income Taxes to Net Income | 148 | % | 149 | % | ||||||
Preferred Dividend Factor on Pretax Basis | 1,014 | 1,021 | ||||||||
Fixed Charges (d) | 101,798 | 106,348 | ||||||||
Combined Fixed Charges and Preferred Stock Dividends | $ | 102,812 | $ | 107,369 | ||||||
Ratio of Earnings to Fixed Charges | 2.8x | 4.1x | ||||||||
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends | 2.8x | 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 | 1 | $ | 3,514 | 4 | — | — | |||||
04-01698 | — | 634 | 2 | — | — | ||||||
04-05140 | 1 | 1,279 | 3 | 3 | — | ||||||
04-05156 | — | 834 | — | — | 3 | ||||||
10-02088 | — | 100 | — | — | — | ||||||
10-02089 | 1 | — | — | — | — | ||||||
10-02209 | — | 408 | 1 | 1 | — | ||||||
21-00462 | — | 3,690 | 1 | — | — | ||||||
21-02702 | — | 500 | — | — | — | ||||||
21-02718 | 2 | — | — | — | — | ||||||
21-03096 | — | 100 | — | — | — | ||||||
21-03642 | 1 | — | — | — | — | ||||||
24-00462 | — | 1,017 | — | — | — | ||||||
24-00478 | 1 | — | — | — | — | ||||||
24-01935 | 2 | — | — | — | — | ||||||
24-02414 | — | 300 | — | — | — | ||||||
32-00774 | — | 100 | — | — | — | ||||||
32-00778 | — | 2,184 | — | — | — | ||||||
32-00950 | 8 | — | — | — | — | ||||||
35-00495 | — | 100 | — | — | — | ||||||
35-02906 | — | 100 | — | — | — | ||||||
35-03404 | — | 100 | — | — | — | ||||||
35-03449 | — | — | 5 | — | — | ||||||
35-03505 | — | 200 | — | — | — | ||||||
35-03650 | — | 100 | — | — | — | ||||||
35-03667 | — | 100 | 3 | — | — | ||||||
41-02639 | 2 | 300 | 2 | 2 | — | ||||||
48-00715 | — | 200 | — | — | — | ||||||
48-01383 | — | 100 | — | — | — | ||||||
48-01670 | — | 200 | — | — | — | ||||||
50-00689 | — | 100 | — | — | — | ||||||
50-00883 | — | 100 | — | — | — | ||||||
50-01196 | — | 200 | — | — | — | ||||||
51-00036 | — | 4,976 | 1 | 1 | — | ||||||
19 | $ | 21,536 | 22 | 7 | 3 |
• | 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 |
• | Complaints for Compensation - A complaint for compensation may be filed with the Commission by miners entitled to compensation when a mine is closed by certain withdrawal orders issued by MSHA. The purpose of the proceeding is to determine the amount of compensation, if any, due miners idled by the orders. |
• | 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 | — | — | — | — | ||||||
04-05140 | 3 | — | — | — | — | — | ||||||
10-02209 | 1 | — | — | — | — | — | ||||||
21-00462 | 1 | — | — | — | — | — | ||||||
35-03449 | — | 5 | — | — | — | — | ||||||
35-03667 | — | 3 | — | — | — | — | ||||||
41-02639 | 2 | — | — | — | — | — | ||||||
51-00036 | 1 | — | — | — | — | — | ||||||
8 | 10 | — | — | — | 4 |
Cash flow information (Details) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended | |
---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Cash flow information [Abstract] | ||
Interest, net of amount capitalized | $ 57,956 | $ 63,669 |
Income taxes, net | 3,210 | (11,331) |
Property, plant and equipment additions in accounts payable | $ 68,636 | $ 31,100 |
Income taxes (Details) (USD $)
|
3 Months Ended | |
---|---|---|
Mar. 31, 2012
|
Mar. 31, 2011
|
|
Income Tax Disclosure [Abstract] | ||
Income tax expense for unrecognized tax positions | $ 2,200,000 | |
Reduction in deferred income tax expense due to deferred income tax rate reduction | 2,500,000 | |
Income tax benefit from continuing operations | 4,200,000 | |
Unrecognized tax benefits, decreases resulting from settlements with taxing authorities | 2,800,000 | |
Interest related to reversal of unrecognized tax benefits previously established for 2004 through 2006 tax years | $ 600,000 |
Fair value measurements (Details 2) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Concentration risks, percentage [Abstract] | ||||||||||||
Percentage investment in common stock of mid-cap companies | 28.00% | 33.00% | 34.00% | |||||||||
Percentage investment in common stock of small-cap companies | 28.00% | 34.00% | 33.00% | |||||||||
Percentage investment in common stock of large-cap companies | 29.00% | 32.00% | 32.00% | |||||||||
Percentage in fixed-income and other investments | 15.00% | |||||||||||
Percentage investment in cash and cash equivalents | 1.00% | 1.00% | ||||||||||
Fair value, measurements, recurring [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 103,288 | 187,659 | 165,568 | |||||||||
Liabilities, fair value disclosure | 9,934 | 18,863 | 6,676 | |||||||||
Fair value, measurements, recurring [Member] | Commodity derivative instruments, liabilities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Liabilities, fair value disclosure | 2,155 | 14,101 | 3,185 | |||||||||
Fair value, measurements, recurring [Member] | Interest rate swap [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Liabilities, fair value disclosure | 7,779 | 4,762 | 3,491 | |||||||||
Fair value, measurements, recurring [Member] | Money market funds [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 21,816 | 97,500 | 56,194 | |||||||||
Fair value, measurements, recurring [Member] | Insurance investment contract [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 48,384 | [1] | 38,352 | [2] | 33,591 | [3] | ||||||
Fair value, measurements, recurring [Member] | Auction rate securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 11,400 | 11,400 | ||||||||||
Fair value, measurements, recurring [Member] | Collateralized mortgage backed securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 8,564 | 8,296 | 8,570 | |||||||||
Fair value, measurements, recurring [Member] | US Treasury securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 1,805 | 1,656 | 1,444 | |||||||||
Fair value, measurements, recurring [Member] | Commodity derivative instruments , assets [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 22,719 | 30,455 | 54,369 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 1 [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
Liabilities, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 1 [Member] | Commodity derivative instruments, liabilities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Liabilities, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 1 [Member] | Interest rate swap [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Liabilities, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 1 [Member] | Money market funds [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 1 [Member] | Insurance investment contract [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | [1] | 0 | [2] | 0 | [3] | ||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 1 [Member] | Auction rate securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | ||||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 1 [Member] | Collateralized mortgage backed securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 1 [Member] | US Treasury securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 1 [Member] | Commodity derivative instruments , assets [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 2 [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 103,288 | 187,659 | 165,568 | |||||||||
Liabilities, fair value disclosure | 9,934 | 18,863 | 6,676 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 2 [Member] | Commodity derivative instruments, liabilities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Liabilities, fair value disclosure | 2,155 | 14,101 | 3,185 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 2 [Member] | Interest rate swap [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Liabilities, fair value disclosure | 7,779 | 4,762 | 3,491 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 2 [Member] | Money market funds [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 21,816 | 97,500 | 56,194 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 2 [Member] | Insurance investment contract [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 48,384 | [1] | 38,352 | [2] | 33,591 | [3] | ||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 2 [Member] | Auction rate securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 11,400 | 11,400 | ||||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 2 [Member] | Collateralized mortgage backed securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 8,564 | 8,296 | 8,570 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 2 [Member] | US Treasury securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 1,805 | 1,656 | 1,444 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 2 [Member] | Commodity derivative instruments , assets [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 22,719 | 30,455 | 54,369 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 3 [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
Liabilities, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 3 [Member] | Commodity derivative instruments, liabilities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Liabilities, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 3 [Member] | Interest rate swap [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Liabilities, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 3 [Member] | Money market funds [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 3 [Member] | Insurance investment contract [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | [1] | 0 | [2] | 0 | [3] | ||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 3 [Member] | Auction rate securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | ||||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 3 [Member] | Collateralized mortgage backed securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 3 [Member] | US Treasury securities [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
Fair value, measurements, recurring [Member] | Fair value, inputs, level 3 [Member] | Commodity derivative instruments , assets [Member]
|
||||||||||||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||||||||||||
Assets, fair value disclosure | 0 | 0 | 0 | |||||||||
|
Business segment data (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information on the Company's businesses | Information on the Company's businesses was as follows:
|
Contingencies
|
9 Months Ended |
---|---|
Sep. 30, 2012
|
|
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is party to claims and lawsuits arising out of its business and that of its consolidated subsidiaries. The Company accrues a liability for those contingencies when the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, the Company discloses the nature of the contingency and, where feasible, an estimate of the possible loss. The Company had accrued liabilities of $41.6 million, $40.6 million and $64.1 million for contingencies related to litigation and environmental matters as of September 30, 2012 and 2011, and December 31, 2011, respectively, which includes amounts that may have been accrued for matters discussed in Litigation and Environmental matters within this note. Litigation Guarantee Obligation Under a Construction Contract Centennial guaranteed CEM's obligations under a construction contract with LPP for a 550-MW combined-cycle electric generating facility near Hobbs, New Mexico. Centennial Resources sold CEM in July 2007 to Bicent. In February 2009, Centennial received a Notice and Demand from LPP under the guarantee agreement alleging that CEM did not meet certain of its obligations under the construction contract and demanding that Centennial indemnify LPP against all losses, damages, claims, costs, charges and expenses arising from CEM's alleged failures. In December 2009, LPP submitted a demand for arbitration of its dispute with CEM to the American Arbitration Association seeking compensatory damages of $149.7 million. An arbitration award was issued January 13, 2012, awarding LPP $22.0 million. Centennial subsequently received a demand from LPP for payment of the arbitration award plus interest and attorneys' fees. An accrual related to the guarantee as a result of the arbitration award was recorded in discontinued operations on the Consolidated Statement of Income in the fourth quarter of 2011. CEM filed a petition with the New York Supreme Court to vacate the arbitration award in favor of LPP. On October 19, 2012, Centennial moved to intervene in the New York Supreme Court action to vacate the arbitration award and also filed a complaint with the New York Supreme Court seeking a declaration that LPP is not entitled to indemnification from Centennial under the guaranty for the arbitration award. For more information regarding discontinued operations, see Note 9. Construction Materials Until the fall of 2011 when it discontinued active mining operations at the pit, JTL operated the Target Range Gravel Pit in Missoula County, Montana under a 1975 reclamation contract pursuant to the Montana Opencut Mining Act. In September 2009, the Montana DEQ sent a letter asserting JTL was in violation of the Montana Opencut Mining Act by conducting mining operations outside a permitted area. JTL filed a complaint in Montana First Judicial District Court in June 2010, seeking a declaratory order that the reclamation contract is a valid permit under the Montana Opencut Mining Act. The Montana DEQ filed an answer and counterclaim to the complaint in August 2011, alleging JTL was in violation of the Montana Opencut Mining Act and requesting imposition of penalties of not more than $3.7 million plus not more than $5,000 per day from the date of the counterclaim. The Company believes the operation of the Target Range Gravel Pit was conducted under a valid permit; however, the imposition of civil penalties is reasonably possible. The Company filed an application for amendment of its opencut mining permit and intends to resolve this matter through settlement or continuation of the Montana First Judicial District Court litigation. Natural Gas Gathering Operations In January 2010, SourceGas filed an application with the Colorado State District Court to compel WBI Energy Midstream to arbitrate a dispute regarding operating pressures under a natural gas gathering contract on one of WBI Energy Midstream's pipeline gathering systems in Montana. WBI Energy Midstream resisted the application and sought a declaratory order interpreting the gathering contract. In May 2010, the Colorado State District Court granted the application and ordered WBI Energy Midstream into arbitration. An arbitration hearing was held in August 2010. In October 2010, the arbitration panel issued an award in favor of SourceGas for approximately $26.6 million. As a result, WBI Energy Midstream, which is included in the pipeline and energy services segment, recorded a $26.6 million charge ($16.5 million after tax) in the third quarter of 2010. On April 20, 2011, the Colorado State District Court confirmed the arbitration award as a court judgment. WBI Energy Midstream filed an appeal from the Colorado State District Court's order and judgment to the Colorado Court of Appeals. The Colorado Court of Appeals issued a decision on May 24, 2012, reversing the Colorado State District Court order compelling arbitration, vacating the final award and remanding the case to the Colorado State District Court to determine SourceGas's claims and WBI Energy Midstream's counterclaims. As a result of the Colorado Court of Appeals decision, in the second quarter of 2012, WBI Energy Midstream recorded a net benefit of $24.1 million ($15.0 million after tax), which is largely reflected in operation and maintenance expense on the Consolidated Statements of Income, related to this matter because the incurrence of a loss for the arbitration award is not probable. On August 2, 2012, SourceGas filed a petition for writ of certiorari with the Colorado Supreme Court for review of the Colorado Court of Appeals decision. WBI Energy Midstream anticipates that on remand to the Colorado State District Court, SourceGas will assert claims similar to those asserted in the arbitration proceeding. In a related matter, Omimex filed a complaint against WBI Energy Midstream in Montana Seventeenth Judicial District Court in July 2010 alleging WBI Energy Midstream breached a separate gathering contract with Omimex as a result of the increased operating pressures demanded by SourceGas on the same natural gas gathering system. In December 2011, Omimex filed an amended complaint alleging WBI Energy Midstream breached obligations to operate its gathering system as a common carrier under United States and Montana law. WBI Energy Midstream removed the action to the United States District Court for the District of Montana. Expert reports submitted by Omimex contend its damages as a result of the increased operating pressures are $16.1 million to $22.6 million. The Company believes the claims asserted by Omimex are without merit and an award is not deemed probable. The Company intends to vigorously defend against the claims. The Company also is involved in other legal actions in the ordinary course of its business. After taking into account liabilities accrued for the foregoing matters, management believes that the outcomes with respect to the above and other legal proceedings will not have a material effect upon the Company's financial position, results of operations or cash flows. Environmental matters Portland Harbor Site In December 2000, Knife River - Northwest was named by the EPA as a PRP in connection with the cleanup of a riverbed site adjacent to a commercial property site acquired by Knife River - Northwest from Georgia-Pacific West, Inc. in 1999. The riverbed site is part of the Portland, Oregon, Harbor Superfund Site. The EPA wants responsible parties to share in the cleanup of sediment contamination in the Willamette River. To date, costs of the overall remedial investigation and feasibility study of the harbor site are being recorded, and initially paid, through an administrative consent order by the LWG, a group of several entities, which does not include Knife River - Northwest or Georgia-Pacific West, Inc. Investigative costs are indicated to be in excess of $70 million. It is not possible to estimate the cost of a corrective action plan until the remedial investigation and feasibility study have been completed, the EPA has decided on a strategy and a ROD has been published. Corrective action will be taken after the development of a proposed plan and ROD on the harbor site is issued. Knife River - Northwest also received notice in January 2008 that the Portland Harbor Natural Resource Trustee Council intends to perform an injury assessment to natural resources resulting from the release of hazardous substances at the Harbor Superfund Site. The Portland Harbor Natural Resource Trustee Council indicates the injury determination is appropriate to facilitate early settlement of damages and restoration for natural resource injuries. It is not possible to estimate the costs of natural resource damages until an assessment is completed and allocations are undertaken. Based upon a review of the Portland Harbor sediment contamination evaluation by the Oregon DEQ and other information available, Knife River - Northwest does not believe it is a Responsible Party. In addition, Knife River - Northwest has notified Georgia-Pacific West, Inc., that it intends to seek indemnity for liabilities incurred in relation to the above matters pursuant to the terms of their sale agreement. Knife River - Northwest has entered into an agreement tolling the statute of limitations in connection with the LWG's potential claim for contribution to the costs of the remedial investigation and feasibility study. By letter in March 2009, LWG stated its intent to file suit against Knife River - Northwest and others to recover LWG's investigation costs to the extent Knife River - Northwest cannot demonstrate its non-liability for the contamination or is unwilling to participate in an alternative dispute resolution process that has been established to address the matter. At this time, Knife River - Northwest has agreed to participate in the alternative dispute resolution process. The Company believes it is not probable that it will incur any material environmental remediation costs or damages in relation to the above referenced administrative action. Manufactured Gas Plant Sites There are three claims against Cascade for cleanup of environmental contamination at manufactured gas plant sites operated by Cascade's predecessors. The first claim is for contamination at a site in Eugene, Oregon which was received in 1995. There are PRPs in addition to Cascade that may be liable for cleanup of the contamination. Some of these PRPs have shared in the investigation costs. It is expected that these and other PRPs will share in the cleanup costs. Several alternatives for cleanup have been identified, with preliminary cost estimates ranging from approximately $500,000 to $11.0 million. The Oregon DEQ is preparing a staff report which will recommend a cleanup alternative for the site. It is not known at this time what share of the cleanup costs will actually be borne by Cascade; however, Cascade anticipates its proportional share could be approximately 50 percent. Cascade has accrued $1.3 million for remediation of this site. The second claim is for contamination at a site in Bremerton, Washington which was received in 1997. A preliminary investigation has found soil and groundwater at the site contain contaminants requiring further investigation and cleanup. EPA conducted a Targeted Brownfields Assessment of the site and released a report summarizing the results of that assessment in August 2009. The assessment confirms that contaminants have affected soil and groundwater at the site, as well as sediments in the adjacent Port Washington Narrows. Alternative remediation options have been identified with preliminary cost estimates ranging from $340,000 to $6.4 million. Data developed through the assessment and previous investigations indicates the contamination likely derived from multiple, different sources and multiple current and former owners of properties and businesses in the vicinity of the site may be responsible for the contamination. In April 2010, the Washington Department of Ecology issued notice it considered Cascade a PRP for hazardous substances at the site. In May 2012, the EPA added the site to the National Priorities List. Cascade is in discussions with the EPA regarding an administrative settlement agreement and consent order with the intent of reaching consensus on the scope and schedule for a remedial investigation and feasibility study for the site. Cascade has accrued $6.4 million for the remedial investigation and feasibility study and $6.4 million for remediation of this site. In April 2010, Cascade filed a petition with the WUTC for authority to defer the costs, which are included in other noncurrent assets, incurred in relation to the environmental remediation of this site until the next general rate case. The WUTC approved the petition in September 2010, subject to conditions set forth in the order. The third claim is for contamination at a site in Bellingham, Washington. Cascade received notice from a party in May 2008 that Cascade may be a PRP, along with other parties, for contamination from a manufactured gas plant owned by Cascade and its predecessor from about 1946 to 1962. The notice indicates that current estimates to complete investigation and cleanup of the site exceed $8.0 million. Other PRPs have reached an agreed order and work plan with the Washington Department of Ecology for completion of a remedial investigation and feasibility study for the site. A report documenting the initial phase of the remedial investigation was completed in June 2011. There is currently not enough information available to estimate the potential liability to Cascade associated with this claim although Cascade believes its proportional share of any liability will be relatively small in comparison to other PRPs. The plant manufactured gas from coal between approximately 1890 and 1946. In 1946, shortly after Cascade's predecessor acquired the plant, it converted the plant to a propane-air gas facility. There are no documented wastes or by-products resulting from the mixing or distribution of propane-air gas. Cascade has received notices from certain of its insurance carriers that they will participate in defense of Cascade for these contamination claims subject to full and complete reservations of rights and defenses to insurance coverage. To the extent these claims are not covered by insurance, Cascade will seek recovery through the OPUC and WUTC of remediation costs in its natural gas rates charged to customers. Halawa Quarry The State of Hawaii Department of Health issued a Notice of Violation to Hawaiian Cement dated August 31, 2012, alleging violations of Hawaii's Water Pollution statute at Hawaiian Cement's Halawa Quarry by failure to comply with the quarry's National Pollutant Discharge Elimination System permit by failing to design, construct and maintain a facility to contain or treat the volume of all process wastewater and storm water that would result from a 10-year, 24-hour rainfall event. The Notice of Violation also alleges Hawaiian Cement violated the quarry's permit by discharging pollution, including levels of pH and total suspended solids in excess of the permit limits, on three occasions in January, June and December 2011. The Notice of Violation seeks development and implementation of corrective action plans and unspecified administrative penalties. Hawaiian Cement expects to resolve the Notice of Violation through a negotiated settlement with monetary penalties of approximately $100,000 as well as development and implementation of corrective action plans, the final cost of which have not been determined but which are not expected to be material. Guarantees Centennial guaranteed CEM's obligations under a construction contract. For more information, see Litigation in this note. In connection with the sale of the Brazilian Transmission Lines, as discussed in Note 10, Centennial has agreed to guarantee payment of any indemnity obligations of certain of the Company's indirect wholly owned subsidiaries who are the sellers in three purchase and sale agreements for periods ranging up to 10 years from the date of sale. The guarantees were required by the buyers as a condition to the sale of the Brazilian Transmission Lines. WBI Holdings has guaranteed certain of Fidelity's oil and natural gas swap and collar agreement obligations. There is no fixed maximum amount guaranteed in relation to the oil and natural gas swap and collar agreements as the amount of the obligation is dependent upon oil and natural gas commodity prices. The amount of hedging activity entered into by the subsidiary is limited by corporate policy. The guarantees of the oil and natural gas swap and collar agreements at September 30, 2012, expire in the years ranging from 2012 to 2013; however, Fidelity continues to enter into additional hedging activities and, as a result, WBI Holdings from time to time may issue additional guarantees on these hedging obligations. The amount outstanding by Fidelity was $400,000 and was reflected on the Consolidated Balance Sheet at September 30, 2012. In the event Fidelity defaults under its obligations, WBI Holdings would be required to make payments under its guarantees. Certain subsidiaries of the Company have outstanding guarantees to third parties that guarantee the performance of other subsidiaries of the Company. These guarantees are related to construction contracts, natural gas transportation and sales agreements, gathering contracts and certain other guarantees. At September 30, 2012, the fixed maximum amounts guaranteed under these agreements aggregated $73.3 million. The amounts of scheduled expiration of the maximum amounts guaranteed under these agreements aggregate $4.3 million in 2012; $52.0 million in 2013; $300,000 in 2014; $100,000 in 2015; $100,000 in 2016; $700,000 in 2018; $300,000 in 2019; $11.5 million, which is subject to expiration on a specified number of days after the receipt of written notice; and $4.0 million, which has no scheduled maturity date. The amount outstanding by subsidiaries of the Company under the above guarantees was $500,000 and was reflected on the Consolidated Balance Sheet at September 30, 2012. In the event of default under these guarantee obligations, the subsidiary issuing the guarantee for that particular obligation would be required to make payments under its guarantee. Certain subsidiaries have outstanding letters of credit to third parties related to insurance policies, natural gas transportation agreements and other agreements, some of which are guaranteed by other subsidiaries of the Company. At September 30, 2012, the fixed maximum amounts guaranteed under these letters of credit, aggregated $27.5 million. In 2012 and 2013, $22.2 million and $5.3 million, respectively, of letters of credit are scheduled to expire. There were no amounts outstanding under the above letters of credit at September 30, 2012. WBI Holdings has an outstanding guarantee to WBI Energy Transmission. This guarantee is related to a natural gas transportation and storage agreement that guarantees the performance of Prairielands. At September 30, 2012, the fixed maximum amount guaranteed under this agreement was $5.0 million and is scheduled to expire in 2014. In the event of Prairielands' default in its payment obligations, WBI Holdings would be required to make payment under its guarantee. The amount outstanding by Prairielands under the above guarantee was $1.1 million. The amount outstanding under this guarantee was not reflected on the Consolidated Balance Sheet at September 30, 2012, because this intercompany transaction was eliminated in consolidation. In addition, Centennial, Knife River and MDU Construction Services have issued guarantees to third parties related to the routine purchase of maintenance items, materials and lease obligations for which no fixed maximum amounts have been specified. These guarantees have no scheduled maturity date. In the event a subsidiary of the Company defaults under these obligations, Centennial, Knife River and MDU Construction Services would be required to make payments under these guarantees. Any amounts outstanding by subsidiaries of the Company for these guarantees were reflected on the Consolidated Balance Sheet at September 30, 2012. In the normal course of business, Centennial has surety bonds related to construction contracts and reclamation obligations of its subsidiaries, as well as an arbitration award. In the event a subsidiary of Centennial does not fulfill a bonded obligation, Centennial would be responsible to the surety bond company for completion of the bonded contract or obligation. A large portion of the surety bonds is expected to expire within the next 12 months; however, Centennial will likely continue to enter into surety bonds for its subsidiaries in the future. As of September 30, 2012, approximately $532 million of surety bonds were outstanding, which were not reflected on the Consolidated Balance Sheet. |
Acquisitions (Details) (USD $)
In Millions, unless otherwise specified |
May 18, 2012
|
---|---|
Business Acquisition [Line Items] | |
Percentage of undivided interest | 50.00% |
Business acquisition, cost of acquired entity, purchase price | $ 67.5 |
Other intangible assets (Details 2) (USD $)
|
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Dec. 31, 2011
|
|
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets, net (excluding goodwill) | $ 18,015,000 | $ 22,248,000 | $ 18,015,000 | $ 22,248,000 | $ 20,843,000 |
Amortization of intangible assets | 1,000,000 | 1,100,000 | 2,900,000 | 3,000,000 | |
Estimated amortization expense for amortizable intangible assets [Abstract] | |||||
2012 | 3,800,000 | 3,800,000 | |||
2013 | 3,700,000 | 3,700,000 | |||
2014 | 3,400,000 | 3,400,000 | |||
2015 | 2,600,000 | 2,600,000 | |||
2016 | 2,200,000 | 2,200,000 | |||
Thereafter | 5,200,000 | 5,200,000 | |||
Customer relationships [Member]
|
|||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | 21,310,000 | 21,702,000 | 21,310,000 | 21,702,000 | 21,702,000 |
Finite-lived intangible assets, accumulated amortization | (11,192,000) | (9,896,000) | (11,192,000) | (9,896,000) | (10,392,000) |
Intangible assets, net (excluding goodwill) | 10,118,000 | 11,806,000 | 10,118,000 | 11,806,000 | 11,310,000 |
Noncompete agreements [Member]
|
|||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | 7,236,000 | 7,685,000 | 7,236,000 | 7,685,000 | 7,685,000 |
Finite-lived intangible assets, accumulated amortization | (5,198,000) | (5,222,000) | (5,198,000) | (5,222,000) | (5,371,000) |
Intangible assets, net (excluding goodwill) | 2,038,000 | 2,463,000 | 2,038,000 | 2,463,000 | 2,314,000 |
Other intangible assets [Member]
|
|||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | 10,979,000 | 12,901,000 | 10,979,000 | 12,901,000 | 11,442,000 |
Finite-lived intangible assets, accumulated amortization | (5,120,000) | (4,922,000) | (5,120,000) | (4,922,000) | (4,223,000) |
Intangible assets, net (excluding goodwill) | $ 5,859,000 | $ 7,979,000 | $ 5,859,000 | $ 7,979,000 | $ 7,219,000 |
Oil and natural gas properties Oil and natural gas properties (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Oil and natural gas properties [Abstract] | ||||
Discount rate used in calculating present value of future net cash flows from proved reserves | 10.00% | 10.00% | ||
Write-down of oil and natural gas properties | $ 160,100 | $ 0 | $ 160,100 | $ 0 |
Write-down of oil and natural gas properties, after tax | 100,900 | 100,900 | ||
Effects of cash flow hedges not considered in calculating ceiling limitation, amount | 19,500 | 19,500 | ||
Effects of cash flow hedges not considered in calculating ceiling limitation amount, after tax | $ 12,300 | $ 12,300 |
Regulatory matters and revenues subject to refund (Details) (MTPSC [Member], USD $)
In Millions, unless otherwise specified |
Sep. 26, 2012
|
---|---|
MTPSC [Member]
|
|
Regulatory matters and revenues subject to refund [Line Items] | |
Total gas rate increase requested | $ 3.5 |
Percent above current rates requested | 5.90% |
Amount of requested interim increase in annual gas rates | $ 1.7 |
Requested percentage of interim gas rate increase | 2.90% |
Number of days to be effective within | 30 days |
Fair value measurements (Details 3) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
---|---|---|---|
Carrying (reported) amount, fair value disclosure [Member]
|
|||
Fair value, balance sheet grouping, financial statement captions [Line Items] | |||
Long-term debt | $ 1,742,977 | $ 1,424,678 | $ 1,423,614 |
Estimate of fair value, fair value disclosure [Member]
|
|||
Fair value, balance sheet grouping, financial statement captions [Line Items] | |||
Long-term debt | $ 1,906,673 | $ 1,592,807 | $ 1,568,942 |
Accounts receivable and allowance for doubtful accounts
|
9 Months Ended |
---|---|
Sep. 30, 2012
|
|
Accounts receivable and allowance for doubtful accounts [Abstract] | |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable consists primarily of trade receivables from the sale of goods and services which are recorded at the invoiced amount net of allowance for doubtful accounts, and costs and estimated earnings in excess of billings on uncompleted contracts. The total balance of receivables past due 90 days or more was $35.1 million, $27.9 million and $29.8 million as of September 30, 2012 and 2011, and December 31, 2011. The allowance for doubtful accounts is determined through a review of past due balances and other specific account data. Account balances are written off when management determines the amounts to be uncollectible. The Company's allowance for doubtful accounts as of September 30, 2012 and 2011, and December 31, 2011, was $10.5 million, $12.1 million and $12.4 million, respectively. |