MDU RESOURCES GROUP INCMDU
MDU RESOURCES GROUP INC Revenue Disclosure
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.
As part of the adoption of ASC 606 - Revenue from Contracts with Customers, the Company elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is 12 months or less.
Disaggregation
In the following table, 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 14.
| Year ended December 31, 2025 | Electric | Natural gas distribution | Pipeline | Other | Total | ||||||||||||
| (In thousands) | |||||||||||||||||
Residential utility sales | $ | 137,673 | $ | 654,793 | $ | — | $ | — | $ | 792,466 | |||||||
| Commercial utility sales | 187,097 | 436,431 | — | — | 623,528 | ||||||||||||
| Industrial utility sales | 38,066 | 44,183 | — | — | 82,249 | ||||||||||||
| Other utility sales | 7,537 | — | — | — | 7,537 | ||||||||||||
| Natural gas transportation | — | 66,978 | 191,542 | — | 258,520 | ||||||||||||
| Natural gas storage | — | — | 23,270 | — | 23,270 | ||||||||||||
| Other | 74,159 | 62,894 | 14,185 | 722 | 151,960 | ||||||||||||
| Intersegment eliminations | (553) | (345) | (74,992) | (722) | (76,612) | ||||||||||||
| Revenues from contracts with customers | 443,979 | 1,264,934 | 154,005 | — | 1,862,918 | ||||||||||||
| Other revenues | (6,202) | 18,196 | 154 | — | 12,148 | ||||||||||||
| Total external operating revenues | $ | 437,777 | $ | 1,283,130 | $ | 154,159 | $ | — | $ | 1,875,066 | |||||||
| Year ended December 31, 2024 | Electric | Natural gas distribution | Pipeline | Other | Total | ||||||||||||
| (In thousands) | |||||||||||||||||
| Residential utility sales | $ | 140,054 | $ | 646,049 | $ | — | $ | — | $ | 786,103 | |||||||
| Commercial utility sales | 171,760 | 399,087 | — | — | 570,847 | ||||||||||||
| Industrial utility sales | 42,883 | 42,588 | — | — | 85,471 | ||||||||||||
| Other utility sales | 7,910 | — | — | — | 7,910 | ||||||||||||
| Natural gas transportation | — | 60,645 | 174,623 | — | 235,268 | ||||||||||||
| Natural gas storage | — | — | 23,690 | — | 23,690 | ||||||||||||
| Other | 59,288 | 40,703 | 13,139 | 195 | 113,325 | ||||||||||||
| Intersegment eliminations | (72) | (130) | (69,222) | (195) | (69,619) | ||||||||||||
| Revenues from contracts with customers | 421,823 | 1,188,942 | 142,230 | — | 1,752,995 | ||||||||||||
| Other revenues | (7,417) | 12,033 | 367 | — | 4,983 | ||||||||||||
| Total external operating revenues | $ | 414,406 | $ | 1,200,975 | $ | 142,597 | $ | — | $ | 1,757,978 | |||||||
| Year ended December 31, 2023 | Electric | Natural gas distribution | Pipeline | Other | Total | ||||||||||||
| (In thousands) | |||||||||||||||||
| Residential utility sales | $ | 136,274 | $ | 724,600 | $ | — | $ | — | $ | 860,874 | |||||||
| Commercial utility sales | 170,321 | 442,507 | — | — | 612,828 | ||||||||||||
| Industrial utility sales | 43,063 | 45,205 | — | — | 88,268 | ||||||||||||
| Other utility sales | 7,270 | — | — | — | 7,270 | ||||||||||||
| Natural gas transportation | — | 52,465 | 145,297 | — | 197,762 | ||||||||||||
| Natural gas storage | — | — | 18,254 | — | 18,254 | ||||||||||||
| Other | 54,508 | 15,141 | 13,874 | 119 | 83,642 | ||||||||||||
| Intersegment eliminations | (138) | (301) | (62,533) | (119) | (63,091) | ||||||||||||
| Revenues from contracts with customers | 411,298 | 1,279,617 | 114,892 | — | 1,805,807 | ||||||||||||
| Other revenues | (10,261) | 7,619 | 187 | — | (2,455) | ||||||||||||
| Total external operating revenues | $ | 401,037 | $ | 1,287,236 | $ | 115,079 | $ | — | $ | 1,803,352 | |||||||
Remaining performance obligations
The remaining performance obligations at the pipeline segment include firm transportation and storage contracts with fixed pricing and fixed volumes. The Company has applied the practical expedient that does not require additional disclosures for contracts with an original duration of less than 12 months to certain firm transportation and non-regulated contracts. The Company's firm transportation and storage contracts included in the remaining performance obligations have weighted average remaining durations of less than four years and one year, respectively.
At December 31, 2025, the Company expects to recognize revenue in future periods from remaining performance obligations, as follows:
| 12 months or less | Next 13-24 months | 25 months or more | Total | ||||||||
| (In Millions) | |||||||||||
| $ | 86.8 | $ | 79.1 | $ | 365.6 | $ | 531.5 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 22, 2019 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.