Revenue from contracts with customers

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue from contracts with customers

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 16.

Three Months Ended September 30, 2020	Electric		Natural gas distribution		Pipeline		Construction materials and contracting		Construction services		Other		Total
	(In thousands)
Residential utility sales	$	33,086	$	48,399	$	—	$	—	$	—	$	—	$	81,485
Commercial utility sales	35,688		28,731		—		—		—		—		64,419
Industrial utility sales	8,428		4,454		—		—		—		—		12,882
Other utility sales	1,779		—		—		—		—		—		1,779
Natural gas transportation	—		11,159		27,583		—		—		—		38,742
Natural gas gathering	—		—		973		—		—		—		973
Natural gas storage	—		—		3,885		—		—		—		3,885
Contracting services	—		—		—		448,569		—		—		448,569
Construction materials	—		—		—		608,673		—		—		608,673
Intrasegment eliminations	—		—		—		(234,693)		—		—		(234,693)
Inside specialty contracting	—		—		—		—		352,845		—		352,845
Outside specialty contracting	—		—		—		—		187,202		—		187,202
Other	7,663		2,590		3,203		—		486		3,030		16,972
Intersegment eliminations	(195)		(185)		(3,622)		(110)		(425)		(3,006)		(7,543)
Revenues from contracts with customers	86,449		95,148		32,022		822,439		540,108		24		1,576,190
Revenues out of scope	998		(445)		46		—		10,500		—		11,099
Total external operating revenues	$	87,447	$	94,703	$	32,068	$	822,439	$	550,608	$	24	$	1,587,289

Three Months Ended September 30, 2019	Electric		Natural gas distribution		Pipeline		Construction materials and contracting		Construction services		Other		Total
	(In thousands)
Residential utility sales	$	30,376	$	44,902	$	—	$	—	$	—	$	—	$	75,278
Commercial utility sales	36,670		29,148		—		—		—		—		65,818
Industrial utility sales	9,348		4,307		—		—		—		—		13,655
Other utility sales	1,862		—		—		—		—		—		1,862
Natural gas transportation	—		11,410		25,229		—		—		—		36,639
Natural gas gathering	—		—		2,510		—		—		—		2,510
Natural gas storage	—		—		3,044		—		—		—		3,044
Contracting services	—		—		—		461,716		—		—		461,716
Construction materials	—		—		—		638,862		—		—		638,862
Intrasegment eliminations	—		—		—		(231,078)		—		—		(231,078)
Inside specialty contracting	—		—		—		—		317,202		—		317,202
Outside specialty contracting	—		—		—		—		151,285		—		151,285
Other	9,380		2,708		5,534		—		45		2,884		20,551
Intersegment eliminations	—		—		(3,831)		(124)		(1,226)		(2,862)		(8,043)
Revenues from contracts with customers	87,636		92,475		32,486		869,376		467,306		22		1,549,301
Revenues out of scope	2,209		1,167		47		—		11,075		—		14,498
Total external operating revenues	$	89,845	$	93,642	$	32,533	$	869,376	$	478,381	$	22	$	1,563,799

Nine Months Ended September 30, 2020	Electric		Natural gas distribution		Pipeline		Construction materials and contracting		Construction services		Other		Total
	(In thousands)
Residential utility sales	$	93,389	$	313,753	$	—	$	—	$	—	$	—	$	407,142
Commercial utility sales	99,152		184,754		—		—		—		—		283,906
Industrial utility sales	26,867		18,633		—		—		—		—		45,500
Other utility sales	5,018		—		—		—		—		—		5,018
Natural gas transportation	—		33,307		82,980		—		—		—		116,287
Natural gas gathering	—		—		4,244		—		—		—		4,244
Natural gas storage	—		—		10,035		—		—		—		10,035
Contracting services	—		—		—		850,326		—		—		850,326
Construction materials	—		—		—		1,299,081		—		—		1,299,081
Intrasegment eliminations	—		—		—		(443,516)		—		—		(443,516)
Inside specialty contracting	—		—		—		—		1,049,975		—		1,049,975
Outside specialty contracting	—		—		—		—		478,047		—		478,047
Other	23,830		7,800		9,807		—		1,249		8,882		51,568
Intersegment eliminations	(586)		(555)		(36,820)		(262)		(3,674)		(8,952)		(50,849)
Revenues from contracts with customers	247,670		557,692		70,246		1,705,629		1,525,597		(70)		4,106,764
Revenues out of scope	2,123		4,949		135		—		33,620		—		40,827
Total external operating revenues	$	249,793	$	562,641	$	70,381	$	1,705,629	$	1,559,217	$	(70)	$	4,147,591

Nine Months Ended September 30, 2019	Electric		Natural gas distribution		Pipeline		Construction materials and contracting		Construction services		Other		Total
	(In thousands)
Residential utility sales	$	93,368	$	316,521	$	—	$	—	$	—	$	—	$	409,889
Commercial utility sales	105,572		192,191		—		—		—		—		297,763
Industrial utility sales	27,576		18,495		—		—		—		—		46,071
Other utility sales	5,540		—		—		—		—		—		5,540
Natural gas transportation	—		33,686		75,091		—		—		—		108,777
Natural gas gathering	—		—		7,027		—		—		—		7,027
Natural gas storage	—		—		8,313		—		—		—		8,313
Contracting services	—		—		—		841,881		—		—		841,881
Construction materials	—		—		—		1,262,938		—		—		1,262,938
Intrasegment eliminations	—		—		—		(412,144)		—		—		(412,144)
Inside specialty contracting	—		—		—		—		936,008		—		936,008
Outside specialty contracting	—		—		—		—		391,971		—		391,971
Other	26,918		9,544		14,523		—		70		13,631		64,686
Intersegment eliminations	—		—		(35,298)		(388)		(2,076)		(13,566)		(51,328)
Revenues from contracts with customers	258,974		570,437		69,656		1,692,287		1,325,973		65		3,917,392
Revenues out of scope	4,449		(781)		171		—		37,332		—		41,171
Total external operating revenues	$	263,423	$	569,656	$	69,827	$	1,692,287	$	1,363,305	$	65	$	3,958,563

Presented in the previous tables are intrasegment revenues within the construction materials and contracting segment to highlight the focus on vertical integration as this segment sells materials to both third parties and internal customers. Due to consolidation requirements, these revenues must be eliminated against construction materials to arrive at the external operating revenue total for the segment.

Contract balances

The timing of revenue recognition may differ from the timing of invoicing to customers. The timing of invoicing to customers does not necessarily correlate with the timing of revenues being recognized under the cost-to-cost method of accounting. Contracts from contracting services are billed as work progresses in accordance with agreed upon contractual terms. Generally, billing to the customer occurs contemporaneous to revenue recognition. A variance in timing of the billings may result in a contract asset or a contract liability. A contract asset occurs when revenues are recognized under the cost-to-cost measure of progress, which exceeds amounts billed on uncompleted contracts. Such amounts will be billed as standard contract terms allow, usually based on various measures of performance or achievement. A contract liability occurs when there are billings in excess of revenues recognized under the cost-to-cost measure of progress on uncompleted contracts. Contract liabilities decrease as revenue is recognized from the satisfaction of the related performance obligation.

The changes in contract assets and liabilities were as follows:

	September 30, 2020		December 31, 2019		Change		Location on Consolidated Balance Sheets
	(In thousands)
Contract assets	$	135,958	$	109,078	$	26,880	Receivables, net
Contract liabilities - current	(158,923)		(142,768)		(16,155)		Accounts payable
Contract liabilities - noncurrent	(62)		(19)		(43)		Noncurrent liabilities - other
Net contract liabilities	$	(23,027)	$	(33,709)	$	10,682

The Company recognized $15.6 million and $137.3 million in revenue for the three and nine months ended September 30, 2020, respectively, which was previously included in contract liabilities at December 31, 2019. The Company recognized $7.5 million and $86.5 million in revenue for the three and nine months ended September 30, 2019, respectively, which was previously included in contract liabilities at December 31, 2018.

The Company recognized a net increase in revenues of $34.7 million and $58.8 million for the three and nine months ended September 30, 2020, respectively, from performance obligations satisfied in prior periods. The Company recognized a net increase in revenues of $21.8 million and $40.3 million for the three and nine months ended September 30, 2019, respectively, from performance obligations satisfied in prior periods.

Remaining performance obligations

The remaining performance obligations, also referred to as backlog, at the construction materials and contracting and construction services segments include unrecognized revenues that the Company reasonably expects to be realized. These unrecognized revenues can include: projects that have a written award, a letter of intent, a notice to proceed, an agreed upon work order to perform work on mutually accepted terms and conditions and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. Excluded from remaining performance obligations are potential orders under master service agreements. The majority of the Company's construction contracts have an original duration of less than two years.

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, which 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 firm storage contracts included in the remaining performance obligations have weighted average remaining durations of approximately five and two years, respectively.

At September 30, 2020, the Company's remaining performance obligations were $2.0 billion. The Company expects to recognize the following revenue amounts in future periods related to these remaining performance obligations: $1.5 billion within the next 12 months or less; $265.6 million within the next 13 to 24 months; and $260.6 million in 25 months or more.