Business segment data

9 Months Ended

Sep. 30, 2019

The Company's reportable segments are those that are 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 operating segments is defined based on the reporting and review process used by the Company's chief executive officer. The vast majority of the Company's operations are located within the United States.

The electric segment generates, transmits and distributes electricity in Montana, North Dakota, South Dakota and Wyoming. The natural gas distribution segment distributes natural gas in those states, as well as in Idaho, Minnesota, Oregon and Washington. These operations also supply related value-added services.

The pipeline and midstream segment provides natural gas transportation, underground storage and gathering services through regulated and nonregulated pipeline systems primarily in the Rocky Mountain and northern Great Plains regions of the United States. This segment also provides cathodic protection and other energy-related services.

The construction materials and contracting segment mines, processes and sells construction aggregates (crushed stone, sand and gravel); produces and sells asphalt mix; and supplies ready-mixed concrete. This segment focuses on vertical integration of its contracting services with its construction materials to support the aggregate based product lines including aggregate placement, asphalt and concrete paving, and site development and grading. Although not common to all locations, other products include the sale of cement, liquid asphalt for various commercial and roadway applications, various finished concrete products and other building materials and related contracting services. This segment operates in the central, southern and western United States and Alaska and Hawaii.

The construction services segment provides inside and outside specialty contracting services. Its inside services include design, construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, and mechanical piping and services. Its outside services include design, construction and maintenance of overhead and underground electrical distribution and transmission lines, substations, external lighting, traffic signalization, and gas pipelines, as well as utility excavation and the manufacture and distribution of transmission line construction equipment. This segment also constructs and maintains renewable energy projects. These specialty contracting services are provided to utilities and large manufacturing, commercial, industrial, institutional and governmental customers.

The Other category includes the activities of Centennial Capital, which, through its subsidiary InterSource Insurance Company, insures various types of risks as a captive insurer for certain of the Company's subsidiaries. The function of the captive insurer is to fund the self-insured layers of the insured Company's general liability, automobile liability, pollution liability and other coverages. Centennial Capital also owns certain real and personal property. In addition, the Other category includes certain assets, liabilities and tax adjustments of the holding company primarily associated with corporate functions and certain general and administrative costs (reflected in operation and maintenance expense) and interest expense which were previously allocated to the refining business and Fidelity that do not meet the criteria for income (loss) from discontinued operations. The Other category also includes Centennial Resources' former investment in Brazil.

Discontinued operations include the results and supporting activities of Dakota Prairie Refining and Fidelity other than certain general and administrative costs and interest expense as described above. For more information on discontinued operations, see Note 10.

The information below follows the same accounting policies as described in Note 1 of the Company's Notes to Consolidated Financial Statements in the 2018 Annual Report. Information on the Company's segments was as follows:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
	(In thousands)
External operating revenues:
Regulated operations:
Electric	$	89,845	$	86,080	$	263,423	$	251,984
Natural gas distribution	93,642		92,248		569,656		554,452
Pipeline and midstream	25,957		22,289		52,230		45,325
	209,444		200,617		885,309		851,761
Nonregulated operations:
Pipeline and midstream	6,576		6,782		17,597		16,640
Construction materials and contracting	869,376		743,763		1,692,287		1,466,435
Construction services	478,381		329,578		1,363,305		986,649
Other	22		47		65		193
	1,354,355		1,080,170		3,073,254		2,469,917
Total external operating revenues	$	1,563,799	$	1,280,787	$	3,958,563	$	3,321,678



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
	(In thousands)
Intersegment operating revenues:
Regulated operations:
Electric	$	—		$	—		$	—		$	—
Natural gas distribution	—			—			—			—
Pipeline and midstream	3,750			3,070			35,098			31,252
	3,750			3,070			35,098			31,252
Nonregulated operations:
Pipeline and midstream	81			117			200			233
Construction materials and contracting	124			165			388			501
Construction services	1,226			782			2,076			1,332
Other	2,862			3,037			13,566			8,343
	4,293			4,101			16,230			10,409
Intersegment eliminations	(8,043		)	(7,171		)	(51,328		)	(41,661		)
Total intersegment operating revenues	$	—		$	—		$	—		$	—

Operating income (loss):
Electric	$	21,930		$	21,140		$	49,708		$	52,321
Natural gas distribution	(15,565		)	(11,665		)	32,132			32,503
Pipeline and midstream	11,416			9,036			32,017			25,687
Construction materials and contracting	143,024			109,598			147,622			120,591
Construction services	29,950			11,863			89,381			51,853
Other	(1,285		)	32			140			417
Total operating income	$	189,470		$	140,004		$	351,000		$	283,372

Net income (loss):
Regulated operations:
Electric	$	16,291		$	15,284		$	39,267		$	37,500
Natural gas distribution	(15,625		)	(11,887		)	14,623			13,884
Pipeline and midstream	6,933			10,109			20,316			20,809
	7,599			13,506			74,206			72,193
Nonregulated operations:
Pipeline and midstream	801			848			1,380			1,136
Construction materials and contracting	102,611			78,876			97,328			79,691
Construction services	21,113			9,278			63,982			38,457
Other	4,004			4,861			3,466			1,928
	128,529			93,863			166,156			121,212
Income from continuing operations	136,128			107,369			240,362			193,405
Income (loss) from discontinued operations, net of tax	1,509			(118		)	26			85
Net income	$	137,637		$	107,251		$	240,388		$	193,490