The Company is an essential services provider, and its strategy is to enhance
shareholder value by increasing market share and profitability in its regulated
energy delivery and construction materials and services businesses, and through
organic growth opportunities and a disciplined approach to strategic
acquisitions of well-managed companies and properties.
The Company operates a two-platform business model. Its regulated energy
delivery platform and its construction materials and services platform are each
comprised of different operating segments. Some 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
provides electric and natural gas services to customers; generates, transmits
and distributes electricity; and provides natural gas transportation, storage
and gathering 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, and provides construction materials through
aggregate mining and marketing of related products, such as ready-mixed concrete
and asphalt.
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 based on 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 anticipates that all of the funds required for capital expenditures
for 2020 will be met from various sources, including internally generated funds;
credit facilities and commercial paper of the Company's subsidiaries, as
described later; and issuance of debt and equity securities if necessary.
For more information on the Company's capital expenditures, see Liquidity and
Capital Commitments.
Impact of the COVID-19 pandemic on the Company
In March 2020, the World Health Organization declared the outbreak of COVID-19 a
pandemic, and the President of the United States declared the COVID-19 outbreak
as a national emergency. Most of the Company's products and services are
considered essential to our country and our communities; therefore, operations
have generally been permitted to continue. While the Company has experienced
some inefficiency impacts, including operation suspensions and interruptions at
some locations to carry out preventative measures or in response to instances of
positive tests, the impacts have not been material. For more information on
specific impacts to each of the Company's business segments, see the respective
Outlook sections. The Company has been able to maintain employment for most of
its workforce and remains committed to the health and safety of its employees
and the communities where it operates. In the first quarter of 2020, the MDU
Resources Group Foundation also accelerated and provided additional donations to
charitable organizations impacted by COVID-19 in the communities in which the
Company operates.
In March 2020, the President of the United States signed into law the CARES Act
in response to the COVID-19 pandemic. The CARES Act provided economic relief and
stimulus to support the national economy during the pandemic, including support
for individuals and businesses affected by the pandemic and economic downturn.
The CARES Act allowed businesses to defer payment of the employer portion of
social security taxes incurred through the end of 2020. At June 30, 2020, the
Company had deferred approximately $17.9 million in payroll taxes related to
this provision. The Company is required to pay 50 percent of the payroll taxes
deferred by the Company under this provision by the end of 2021 and the
remaining balance by the end of 2022.
The Company continues to adjust its business in response to the pandemic while
positioning for an economic rebound and potential opportunities to enhance its
competitive position. The Company's business strategy incorporates preparation
for unexpected economic adversity, which includes maintaining a strong liquidity
position to weather a variety of economic scenarios, a strong balance sheet with
conservative debt leverage and financial flexibility to access diverse sources
of capital. For more information on the Company's liquidity, see Liquidity and
Capital Commitments. In addition, the Company has evaluated its planned capital
projects to identify potential delays of expenditures to provide additional
financial flexibility and to ensure projects will provide acceptable returns on
investment.
The Company established a task force to monitor developments related to the
pandemic and has implemented procedures to protect employees. Procedures are
established to promptly notify employees, contractors and customers when
individuals may have been exposed to COVID-19 and need to be tested or
self-quarantined due to potential contact. Additionally, the Company has
modified its work practices to include social distancing measures and hygiene
practices. While the Company has begun the initial phase of its return to work
processes for certain office employees, many employees that have the capacity to
work from home continue to do so. The Company has also enacted additional
physical and cybersecurity measures to safeguard systems for remote work
locations.
Although there have been logistical and other challenges as a result of
COVID-19, there were no material adverse impacts on the Company's results of
operations for the three and six months ended June 30, 2020. The situation
surrounding COVID-19 remains fluid and the potential for a material adverse
impact on the Company increases the longer the virus impacts the level of
economic
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Index


activity in the United States. Due to the uncertainty of the economic outlook
resulting from the COVID-19 pandemic, the Company continues to monitor the
situation closely. For more information on the possible impacts, see Item 1A.
Risk Factors.
Consolidated Earnings Overview
The following table summarizes the contribution to the consolidated income by
each of the Company's business segments.

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