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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission file number 1-03480
MDU RESOURCES GROUP INC
(Exact name of registrant as specified in its charter)
Delaware30-1133956
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)

1200 West Century Avenue
P.O. Box 5650
Bismarck, North Dakota 58506-5650
(Address of principal executive offices)
(Zip Code)
(701) 530-1000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareMDUNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No .
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No .
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Accelerated Filer
Non-Accelerated Filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No .
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of April 29, 2021: 201,194,537 shares.
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Definitions
The following abbreviations and acronyms used in this Form 10-Q are defined below:
Abbreviation or Acronym
2020 Annual ReportCompany's Annual Report on Form 10-K for the year ended December 31, 2020
AFUDC
Allowance for funds used during construction
ASC
FASB Accounting Standards Codification
ASU
FASB Accounting Standards Update
Brazilian Transmission Lines
Company's former investment in companies owning three electric transmission lines in Brazil
Cascade
Cascade Natural Gas Corporation, an indirect wholly owned subsidiary of MDU Energy Capital
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 ResourcesCentennial Energy Resources LLC, a former direct wholly owned subsidiary of Centennial
CompanyMDU Resources Group, Inc.
COVID-19Coronavirus disease 2019. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the President of the United States declared the COVID-19 outbreak a national emergency.
Coyote Creek
Coyote Creek Mining Company, LLC, a subsidiary of The North American Coal Corporation
Coyote Station427-MW coal-fired electric generating facility near Beulah, North Dakota (25 percent ownership)
dk
Decatherm
Dodd-Frank Act
Dodd-Frank Wall Street Reform and Consumer Protection Act
EPAUnited States Environmental Protection Agency
Exchange Act
Securities Exchange Act of 1934, as amended
FASB
Financial Accounting Standards Board
FERCFederal Energy Regulatory Commission
FidelityFidelity Exploration & Production Company, a direct wholly owned subsidiary of WBI Holdings (previously referred to as the Company's exploration and production segment)
GAAP
Accounting principles generally accepted in the United States of America
GHG
Greenhouse gas
Great PlainsGreat Plains Natural Gas Co., a public utility division of Montana-Dakota
IBEWInternational Brotherhood of Electrical Workers
ICWUInternational Chemical Workers Union
Intermountain
Intermountain Gas Company, an indirect wholly owned subsidiary of MDU Energy Capital
IPUCIdaho Public Utilities Commission
Knife River
Knife River Corporation, a direct wholly owned subsidiary of Centennial
kWh
Kilowatt-hour
LIBOR
London Inter-bank Offered Rate
MD&A
Management's Discussion and Analysis of Financial Condition and Results of Operations
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
MISO
Midcontinent Independent System Operator, Inc.
MMcf
Million cubic feet
MMdk
Million dk
MNPUC
Minnesota Public Utilities Commission
Montana-DakotaMontana-Dakota Utilities Co., a direct wholly owned subsidiary of MDU Energy Capital
MW
Megawatt
NDDEQNorth Dakota Department of Environmental Quality
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NDPSC
North Dakota Public Service Commission
Non-GAAP
Not in accordance with GAAP
Oil
Includes crude oil and condensate
PHMSAPipeline and Hazardous Materials Safety Administration
Regional Haze RuleThe EPA developed the Regional Haze Rule requiring states to develop and implement comprehensive plans to reduce human-caused regional haze in designated areas such as national parks and wilderness areas.
SDPUC
South Dakota Public Utilities Commission
SEC
United States Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
SOFR
Secured Overnight Financing Rate
SPPSouthwest Power Pool, the organization that manages the electric grid and wholesale power market for the central United States.
VIE
Variable interest entity
WBI Holdings
WBI Holdings, Inc., a direct wholly owned subsidiary of Centennial
WUTC
Washington Utilities and Transportation Commission
WYPSCWyoming Public Service Commission
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Introduction
The Company is a regulated energy delivery and construction materials and services business. The organizational entity was originally incorporated as Montana-Dakota under the state laws of Delaware in 1924. Pursuant to an internal holding company reorganization completed on January 1, 2019, the Company was incorporated under the state laws of Delaware in 2018. Its principal executive offices are located at 1200 West Century Avenue, P.O. Box 5650, Bismarck, North Dakota 58506-5650, telephone (701) 530-1000.
The Company's strategy is to deliver superior value with a two-platform model, regulated energy delivery and construction materials and services businesses, while also pursuing organic growth opportunities and using a disciplined approach to strategic acquisitions of well-managed companies and properties.
The Company focuses on infrastructure and is Building a Strong America® by providing essential products and services through its regulated energy delivery platform and its construction materials and services platform, which are both comprised of different operating segments. Most of these segments experience seasonality related to the industries in which they operate. The two-platform approach helps balance this seasonality and the risk associated with each type of industry. Through its regulated energy delivery platform, the Company generates, transmits and distributes electricity and provides natural gas distribution, transportation and storage services. These businesses are regulated by state public service commissions and/or the FERC. The construction materials and services platform provides construction services to a variety of industries, including commercial, industrial and governmental customers, and provides construction materials through aggregate mining and marketing of related products, such as ready-mixed concrete, asphalt and asphalt oil.
The Company is organized into five reportable business segments. These business segments include: electric, natural gas distribution, pipeline, construction materials and contracting, and construction services. The Company's business segments are determined based on the Company's method of internal reporting, which generally segregates the strategic business units due to differences in products, services and regulation. The internal reporting of these segments is defined based on the reporting and review process used by the Company's chief executive officer.
The Company, through its wholly owned subsidiary, MDU Energy Capital, owns Montana-Dakota, Cascade and Intermountain. The electric segment is comprised of Montana-Dakota while the natural gas distribution segment is comprised of Montana-Dakota, Cascade and Intermountain.
The Company, through its wholly owned subsidiary, Centennial, owns WBI Holdings, Knife River, MDU Construction Services and Centennial Capital. WBI Holdings is the pipeline segment, Knife River is the construction materials and contracting segment, MDU Construction Services is the construction services segment and Centennial Capital is reflected in the Other category.
For more information on the Company's business segments, see Note 17 of the Notes to Consolidated Financial Statements.
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Part I -- Financial Information
Item 1. Financial Statements
MDU Resources Group, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months Ended
 March 31,
 20212020
 (In thousands, except per share amounts)
Operating revenues:  
Electric, natural gas distribution and regulated pipeline
$442,381 $418,682 
Non-regulated pipeline, construction materials and contracting, construction services and other785,557 778,691 
Total operating revenues 1,227,938 1,197,373 
Operating expenses:  
Operation and maintenance:  
Electric, natural gas distribution and regulated pipeline
94,333 87,608 
Non-regulated pipeline, construction materials and contracting, construction services and other717,326 733,392 
Total operation and maintenance811,659 821,000 
Purchased natural gas sold176,237 165,412 
Depreciation, depletion and amortization73,723 69,239 
Taxes, other than income62,534 64,112 
Electric fuel and purchased power18,621 20,540 
Total operating expenses1,142,774 1,140,303 
Operating income85,164 57,070 
Other income (expense)3,354 (1,005)
Interest expense23,453 24,553 
Income before income taxes65,065 31,512 
Income taxes12,949 5,973 
Income from continuing operations52,116 25,539 
Income (loss) from discontinued operations, net of tax15 (409)
Net income$52,131 $25,130 
Earnings per share - basic:  
Income from continuing operations$.26 $.13 
Discontinued operations, net of tax  
Earnings per share - basic$.26 $.13 
Earnings per share - diluted:  
Income from continuing operations$.26 $.13 
Discontinued operations, net of tax  
Earnings per share - diluted$.26 $.13 
Weighted average common shares outstanding - basic200,708 200,440 
Weighted average common shares outstanding - diluted200,952 200,456 
The accompanying notes are an integral part of these consolidated financial statements.
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MDU Resources Group, Inc.
Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended
 March 31,
 20212020
 (In thousands)
Net income$52,131 $25,130 
Other comprehensive income:
Reclassification adjustment for loss on derivative instruments included in net income, net of tax of $37 and $36 for the three months ended in 2021 and 2020, respectively
111 111 
Amortization of postretirement liability losses included in net periodic benefit cost, net of tax of $151 and $149 for the three months ended in 2021 and 2020, respectively
466 462 
Net unrealized gain (loss) on available-for-sale investments:
Net unrealized gain (loss) on available-for-sale investments arising during the period, net of tax of $(12) and $36 for the three months ended in 2021 and 2020, respectively
(44)135 
Reclassification adjustment for (gain) loss on available-for-sale investments included in net income, net of tax of $9 and $0 for the three months ended in 2021 and 2020, respectively
35 (1)
Net unrealized gain (loss) on available-for-sale investments
(9)134 
Other comprehensive income568 707 
Comprehensive income attributable to common stockholders$52,699 $25,837 
The accompanying notes are an integral part of these consolidated financial statements.
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MDU Resources Group, Inc.
Consolidated Balance Sheets
(Unaudited)
 March 31, 2021March 31, 2020December 31, 2020
Assets(In thousands, except shares and per share amounts)
Current assets:   
Cash and cash equivalents$55,094 $116,526 $59,547 
Receivables, net784,582 835,468 873,986 
Inventories316,737 305,958 291,167 
Current regulatory assets98,452 55,206 68,527 
Prepayments and other current assets68,409 60,230 44,120 
Total current assets1,323,274 1,373,388 1,337,347 
Noncurrent assets:   
Property, plant and equipment8,288,879 8,008,338 8,300,770 
Less accumulated depreciation, depletion and amortization3,096,371 3,039,812 3,133,831 
Net property, plant and equipment5,192,508 4,968,526 5,166,939 
Goodwill714,963 713,527 714,963 
Other intangible assets, net23,961 34,250 25,496 
Regulatory assets379,917 348,189 379,381 
Investments167,741 145,237 165,022 
Operating lease right-of-use assets116,663 114,382 120,113 
Other150,248 153,017 144,111 
Total noncurrent assets 6,746,001 6,477,128 6,716,025 
Total assets$8,069,275 $7,850,516 $8,053,372 
Liabilities and Stockholders' Equity   
Current liabilities:   
Short-term borrowings$50,000 $ $50,000 
Long-term debt due within one year1,552 16,560 1,555 
Accounts payable379,348 384,339 426,264 
Taxes payable88,711 58,743 88,844 
Dividends payable42,740 41,608 42,611 
Accrued compensation69,612 55,199 90,629 
Regulatory liabilities due within one year34,266 60,072 31,450 
Operating lease liabilities due within one year32,562 31,141 33,655 
Other accrued liabilities201,246 176,817 198,514 
Total current liabilities 900,037 824,479 963,522 
Noncurrent liabilities:   
Long-term debt2,251,722 2,438,675 2,211,575 
Deferred income taxes528,551 515,711 516,098 
Regulatory liabilities429,060 443,205 428,075 
Asset retirement obligations445,170 417,469 440,356 
Operating lease liabilities84,494 83,414 86,868 
Other329,935 290,971 327,773 
Total noncurrent liabilities 4,068,932 4,189,445 4,010,745 
Commitments and contingencies
Stockholders' equity:
   
Common stock
Authorized - 500,000,000 shares, $1.00 par value
Shares issued - 201,733,458 at March 31, 2021, 201,061,198 at
March 31, 2020 and 201,061,198 at December 31, 2020
201,733 201,061 201,061 
Other paid-in capital1,382,158 1,360,564 1,371,385 
Retained earnings1,567,551 1,319,988 1,558,363 
Accumulated other comprehensive loss(47,510)(41,395)(48,078)
Treasury stock at cost - 538,921 shares
(3,626)(3,626)(3,626)
Total stockholders' equity3,100,306 2,836,592 3,079,105 
Total liabilities and stockholders' equity $8,069,275 $7,850,516 $8,053,372 
The accompanying notes are an integral part of these consolidated financial statements.
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MDU Resources Group, Inc.
Consolidated Statements of Equity
(Unaudited)
Other
Paid-in
Capital
Retained EarningsAccumu-lated
Other
Compre-hensive
Loss
Common StockTreasury Stock
SharesAmountSharesAmountTotal
 (In thousands, except shares)
At December 31, 2020201,061,198 $201,061 $1,371,385 $1,558,363 $(48,078)(538,921)$(3,626)$3,079,105 
Net income
— — — 52,131 — — — 52,131 
Other comprehensive income
— — — — 568 — — 568 
Dividends declared on common stock
— — — (42,943)— — — (42,943)
Stock-based compensation
— — 2,574 — — — — 2,574 
Repurchase of common stock— — — — — (392,294)(6,701)(6,701)
Issuance of common stock upon vesting of stock-based compensation, net of shares used for tax withholdings
— — (10,828)— — 392,294 6,701 (4,127)
Issuance of common stock
672,260 672 19,027 — — — — 19,699 
At March 31, 2021201,733,458 $201,733 $1,382,158 $1,567,551 $(47,510)(538,921)$(3,626)$3,100,306 

Other
Paid-in
Capital
Retained EarningsAccumu-lated
Other
Compre-hensive
Loss
Common StockTreasury Stock
SharesAmountSharesAmountTotal
 (In thousands, except shares)
At December 31, 2019200,922,790 $200,923 $1,355,404 $1,336,647 $(42,102)(538,921)$(3,626)$2,847,246 
Net income
— — — 25,130 — — — 25,130 
Other comprehensive income
— — — — 707 — — 707 
Dividends declared on common stock
— — — (41,789)— — — (41,789)
Stock-based compensation
— — 2,250 — — — — 2,250 
Issuance of common stock upon vesting of stock-based compensation, net of shares used for tax withholdings
26,406 26 (388)— — — — (362)
Issuance of common stock
112,002 112 3,298 — — — — 3,410 
At March 31, 2020201,061,198 $201,061 $1,360,564 $1,319,988 $(41,395)(538,921)$(3,626)$2,836,592 
The accompanying notes are an integral part of these consolidated financial statements.
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MDU Resources Group, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
 March 31,
 20212020
 (In thousands)
Operating activities:  
Net income$52,131 $25,130 
Income (loss) from discontinued operations, net of tax15 (409)
Income from continuing operations52,116 25,539 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation, depletion and amortization73,723 69,239 
Deferred income taxes9,843 1,813 
Changes in current assets and liabilities, net of acquisitions: 
Receivables89,407 44,549 
Inventories(25,613)(29,337)
Other current assets(46,837)14,959 
Accounts payable(41,965)(24,105)
Other current liabilities(13,977)(23,259)
Other noncurrent changes(1,052)326 
Net cash provided by continuing operations95,645 79,724 
Net cash used in discontinued operations(25)(434)
Net cash provided by operating activities95,620 79,290 
Investing activities:  
Capital expenditures(111,091)(139,485)
Acquisitions, net of cash acquired(1,023)(67,593)
Net proceeds from sale or disposition of property and other9,035 4,540 
Investments(3,248)68 
Net cash used in investing activities(106,327)(202,470)
Financing activities:  
Issuance of short-term borrowings50,000  
Repayment of short-term borrowings(50,000) 
Issuance of long-term debt93,295 248,021 
Repayment of long-term debt(53,301)(36,242)
Proceeds from issuance of common stock19,699 3,410 
Dividends paid(42,611)(41,580)
Repurchase of common stock(6,701) 
Tax withholding on stock-based compensation(4,127)(362)
Net cash provided by financing activities6,254 173,247 
Increase (decrease) in cash and cash equivalents(4,453)50,067 
Cash and cash equivalents -- beginning of year59,547 66,459 
Cash and cash equivalents -- end of period$55,094 $116,526 
The accompanying notes are an integral part of these consolidated financial statements.
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MDU Resources Group, Inc.
Notes to Consolidated
Financial Statements
March 31, 2021 and 2020
(Unaudited)
Note 1 - Basis of presentation
The accompanying consolidated interim financial statements were prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Interim financial statements do not include all disclosures provided in annual financial statements and, accordingly, these financial statements should be read in conjunction with those appearing in the 2020 Annual Report. The information is unaudited but includes all adjustments that are, in the opinion of management, necessary for a fair presentation of the accompanying consolidated interim financial statements and are of a normal recurring nature. Depreciation, depletion and amortization expense is reported separately on the Consolidated Statements of Income and therefore is excluded from the other line items within operating expenses.
Beginning in March 2020, governmental restrictions and guidelines implemented to control the spread of COVID-19 reduced commercial and interpersonal activity throughout the Company's areas of operation. Most of the Company's products and services are considered essential and accordingly operations have generally been allowed to continue. The Company has experienced some inefficiency impacts as a result of the COVID-19 pandemic, including operation suspensions and interruptions at some locations to carry out preventive measures or in response to instances of positive tests or quarantines. The Company has assessed the impacts of the COVID-19 pandemic on its results of operations for the three months ended March 31, 2021 and 2020, and determined there were no material adverse impacts.
The assets and liabilities of the Company's discontinued operations have been classified as held for sale and are included in prepayments and other current assets, noncurrent assets - other and other accrued liabilities on the Consolidated Balance Sheets. The results and supporting activities are shown in income (loss) from discontinued operations on the Consolidated Statements of Income. Unless otherwise indicated, the amounts presented in the accompanying notes to the consolidated financial statements relate to the Company's continuing operations.
Management has also evaluated the impact of events occurring after March 31, 2021, up to the date of the issuance of these consolidated interim financial statements on May 6, 2021, that would require recognition or disclosure in the financial statements.
Note 2 - New accounting standards
Recently adopted accounting standards
ASU 2018-14 - Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued guidance on modifying the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans as part of the disclosure framework project. The guidance removes disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant. The guidance adds, among other things, the requirement to include an explanation for significant gains and losses related to changes in benefit obligations for the period. The guidance removes, among other things, the disclosure requirement to disclose the amount of net periodic benefit costs to be amortized over the next fiscal year from accumulated other comprehensive income (loss) and the effects a one percentage point change in assumed health care cost trend rates will have on certain benefit components. The Company adopted the guidance on January 1, 2021, on a retrospective basis. The Company determined the new guidance will not materially impact its consolidated financial statement disclosures.
ASU 2019-12 - Simplifying the Accounting for Income Taxes In December 2019, the FASB issued guidance on simplifying the accounting for income taxes by removing certain exceptions in ASC 740 and providing simplification amendments. The guidance removes exceptions on intraperiod tax allocations and reporting and provides simplification on accounting for franchise taxes, tax basis goodwill and tax law changes. The Company adopted the guidance on January 1, 2021, and determined it did not have a material impact on its results of operations, financial position, cash flows or disclosures.
Recently issued accounting standards not yet adopted
ASU 2020-04 - Reference Rate Reform In March 2020, the FASB issued optional guidance to ease the facilitation of the effects of reference rate reform on financial reporting. The guidance applies to certain contract modifications, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. LIBOR is expected to be retired with a full phase-out by the end of 2021 and replaced by a new reference rate, which includes SOFR. The guidance can be applied beginning in the interim period that includes March 12, 2020, and cannot be applied to contract modifications or hedging relationships entered into or evaluated after December 31, 2022. The Company has updated its credit agreements to include language regarding the successor or alternate rate to LIBOR, and a review of other contracts and agreements is on-going. The Company does not expect the guidance to have a material impact on its results of operations, financial position, cash flows or disclosures.
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Note 3 - Seasonality of operations
Some of the Company's operations are highly seasonal and revenues from, and certain expenses for, such operations may fluctuate significantly among quarterly periods. Accordingly, the interim results for particular businesses, and for the Company as a whole, may not be indicative of results for the full fiscal year.
Note 4 - Receivables and allowance for expected credit losses
Receivables consists primarily of trade receivables from the sale of goods and services, which are recorded at the invoiced amount, and contract assets, net of expected credit losses. For more information on contract assets, see Note 9. The Company's trade receivables are all due in 12 months or less. The total balance of receivables past due 90 days or more was $33.9 million, $51.8 million and $43.9 million at March 31, 2021 and 2020, and December 31, 2020, respectively.
The Company's expected credit losses are determined through a review using historical credit loss experience, changes in asset specific characteristics, current conditions and reasonable and supportable future forecasts, among other specific account data, and is performed at least quarterly. The Company develops and documents its methodology to determine its allowance for expected credit losses at each of its reportable business segments. Risk characteristics used by the business segments may include customer mix, knowledge of customers, general economic conditions of the various local economies and impacts of COVID-19, among others. Specific account balances are written off when management determines the amounts to be uncollectible. Management has reviewed the balance reserved through the allowance for expected credit losses and believes it is reasonable.
Details of the Company's expected credit losses were as follows:
ElectricNatural gas
distribution
PipelineConstruction
materials and
contracting
Construction
services
Total
 (In thousands)
At December 31, 2020$899 $2,571 $2 $6,164 $5,722 $15,358 
Current expected credit loss provision538 1,273  (1,049)(1,079)(317)
Less write-offs charged against the allowance888 1,107  273 401 2,669 
Credit loss recoveries collected129 213    342 
At March 31, 2021$678 $2,950 $2 $4,842 $4,242 $12,714 
ElectricNatural gas
distribution
PipelineConstruction
materials and
contracting
Construction
services
Total
 (In thousands)
At January 1, 2020$328 $1,056 $ $5,357 $1,756 $8,497 
Current expected credit loss provision555 1,156  694 1,150 3,555 
Less write-offs charged against the allowance500 624  68 73 1,265 
Credit loss recoveries collected109 229    338 
At March 31, 2020$492 $1,817 $ $5,983 $2,833 $11,125 
Note 5 - Inventories and natural gas in storage
Natural gas in storage for the Company's regulated operations is generally valued at lower of cost or market using the last-in, first-out method or lower of cost or net realizable value using the average cost or first-in, first-out method. The majority of all other inventories are valued at the lower of cost or net realizable value using the average cost method. The portion of the cost of natural gas in storage expected to be used within 12 months was included in inventories. Inventories on the Consolidated Balance Sheets were as follows:
 March 31, 2021March 31, 2020December 31, 2020
 (In thousands)
Aggregates held for resale$180,450 $155,976 $175,782 
Asphalt oil59,853 73,842 28,238 
Materials and supplies26,481 26,293 25,142 
Merchandise for resale24,319 23,109 21,087 
Natural gas in storage (current)8,113 7,872 21,919 
Other17,521 18,866 18,999 
Total$316,737 $305,958 $291,167 
The remainder of natural gas in storage, which largely represents the cost of gas required to maintain pressure levels for normal operating purposes, was included in noncurrent assets - other and was $47.5 million at March 31, 2021 and December 31, 2020, and $48.3 million at March 31, 2020.
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Note 6 - Earnings per share
Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the applicable period. Diluted earnings per share is computed by dividing net income by the total of the weighted average number of shares of common stock outstanding during the applicable period, plus the effect of non-vested performance share awards and restricted stock units. Common stock outstanding includes issued shares less shares held in treasury. Net income was the same for both the basic and diluted earnings per share calculations. A reconciliation of the weighted average common shares outstanding used in the basic and diluted earnings per share calculations follows:
Three Months Ended
March 31,
20212020
(In thousands, except per share amounts)
Weighted average common shares outstanding - basic200,708 200,440 
Effect of dilutive performance share awards and restricted stock units244 16 
Weighted average common shares outstanding - diluted200,952 200,456 
Shares excluded from the calculation of diluted earnings per share
 68 
Dividends declared per common share
$.2125 $.2075 
Note 7 - Equity
The Company currently has a shelf registration statement on file with the SEC, under which the Company may issue and sell any combination of common stock and debt securities. The Company may sell such securities if warranted by market conditions and the Company's capital requirements.
In August 2020, the Company amended the Distribution Agreement dated February 22, 2019, with JP Morgan Securities LLC and MUFG Securities Americas Inc., as sales agents. This agreement allows the offering, issuance and sale of up to 6.4 million shares of the Company's common stock in connection with an "at-the-market" offering. The common stock may be offered for sale, from time to time, in accordance with the terms and conditions of this agreement.
The Company issued 672,260 shares of common stock during the first quarter of 2021 pursuant to the "at-the-market" offering, receiving net proceeds of $19.7 million, which were used for capital expenditures. The Company incurred issuance costs of approximately $300,000 in connection with the sales of common stock under the "at-the-market" offering during the first quarter of 2021. The Company did not issue shares of common stock under the "at-the-market" offering during the first quarter of 2020. As of March 31, 2021, the Company had capacity to issue up to 5.7 million additional shares of common stock under the "at-the-market" offering program.
Note 8 - Accumulated other comprehensive income (loss)
The after-tax changes in the components of accumulated other comprehensive loss were as follows:
Net Unrealized
Gain (Loss) on
Derivative
 Instruments
 Qualifying as
Hedges
Postretirement
 Liability
Adjustment
Net Unrealized
Gain (Loss) on
Available-for-sale
Investments
Total
Accumulated
 Other
Comprehensive
 Loss
 (In thousands)
At December 31, 2020$(984)$(47,207)$113 $(48,078)
Other comprehensive loss before reclassifications  (44)(44)
Amounts reclassified from accumulated other comprehensive loss111 466 35 612 
Net current-period other comprehensive income (loss) 111 466 (9)568 
At March 31, 2021$(873)$(46,741)$104 $(47,510)
13

Index
Net Unrealized
Gain (Loss) on
Derivative
 Instruments
 Qualifying as
Hedges
Postretirement
 Liability
Adjustment
Net Unrealized
Gain (Loss) on
Available-for-sale
Investments
Total
Accumulated
 Other
Comprehensive
 Loss
 (In thousands)
At December 31, 2019$(1,430)$(40,734)$62 $(42,102)
Other comprehensive income before reclassifications  135 135 
Amounts reclassified (to) from accumulated other comprehensive loss111 462 (1)572 
Net current-period other comprehensive income111 462 134 707 
At March 31, 2020$(1,319)$(40,272)$196 $(41,395)
The following amounts were reclassified out of accumulated other comprehensive loss into net income. The amounts presented in parenthesis indicate a decrease to net income on the Consolidated Statements of Income. The reclassifications were as follows:
Three Months EndedLocation on Consolidated
Statements of
Income
March 31,
20212020
(In thousands)
Reclassification adjustment for loss on derivative instruments included in net income
$(148)$(147)Interest expense
37 36 Income taxes
(111)(111)
Amortization of postretirement liability losses included in net periodic benefit cost
(617)(611)Other income
151 149 Income taxes
(466)(462)
Reclassification adjustment on available-for-sale investments included in net income
(44)1 Other income
9  Income taxes
(35)1 
Total reclassifications$(612)$(572)
14

Index
Note 9 - Revenue from contracts with customers
Revenue is recognized when a performance obligation is satisfied by transferring control over a product or service to a customer. Revenue is measured based on consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. The Company is considered an agent for certain taxes collected from customers. As such, the Company presents revenues net of these taxes at the time of sale to be remitted to governmental authorities, including sales and use taxes.
Disaggregation
In the following tables, revenue is disaggregated by the type of customer or service provided. The Company believes this level of disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The table also includes a reconciliation of the disaggregated revenue by reportable segments. For more information on the Company's business segments, see Note 17.
Three Months Ended March 31, 2021ElectricNatural gas
distribution
PipelineConstruction
materials and
contracting
Construction
services
OtherTotal
(In thousands)
Residential utility sales
$33,436 $203,137 $— $— $— $— $236,573 
Commercial utility sales
32,928 120,052 — — — — 152,980 
Industrial utility sales
10,029 8,812 — — — — 18,841 
Other utility sales
1,566  — — — — 1,566 
Natural gas transportation
— 12,452 29,417 — — — 41,869 
Natural gas storage
— — 4,029 — — — 4,029 
Contracting services
— — — 96,025 — — 96,025 
Construction materials
— — — 216,412 — — 216,412 
Intrasegment eliminations— — — (46,716)— — (46,716)
Inside specialty contracting
— — — — 355,190 — 355,190 
Outside specialty contracting
—