Business segment data

6 Months Ended

Jun. 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				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(In thousands)
External operating revenues:
Regulated operations:
Electric	$	81,011	$	78,499	$	173,578	$	165,904
Natural gas distribution	133,867		129,540		476,014		462,204
Pipeline and midstream	21,369		18,645		26,272		23,035
	236,247		226,684		675,864		651,143
Nonregulated operations:
Pipeline and midstream	7,311		5,415		11,021		9,858
Construction materials and contracting	595,799		509,388		822,911		722,672
Construction services	464,192		323,020		884,925		657,071
Other	24		90		43		146
	1,067,326		837,913		1,718,900		1,389,747
Total external operating revenues	$	1,303,573	$	1,064,597	$	2,394,764	$	2,040,890



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
	(In thousands)
Intersegment operating revenues:
Regulated operations:
Electric	$	—		$	—		$	—		$	—
Natural gas distribution	—			—			—			—
Pipeline and midstream	7,426			6,446			31,349			28,182
	7,426			6,446			31,349			28,182
Nonregulated operations:
Pipeline and midstream	87			93			119			116
Construction materials and contracting	168			235			264			336
Construction services	721			540			849			550
Other	2,879			2,667			10,704			5,306
	3,855			3,535			11,936			6,308
Intersegment eliminations	(11,281		)	(9,981		)	(43,285		)	(34,490		)
Total intersegment operating revenues	$	—		$	—		$	—		$	—

Operating income (loss):
Electric	$	9,791		$	13,027		$	27,779		$	31,182
Natural gas distribution	(2,621		)	(4,371		)	47,696			44,169
Pipeline and midstream	10,698			8,482			20,602			16,650
Construction materials and contracting	46,178			37,301			4,597			10,992
Construction services	31,966			19,356			59,431			39,990
Other	1,299			197			1,425			385
Total operating income	$	97,311		$	73,992		$	161,530		$	143,368

Net income (loss):
Regulated operations:
Electric	$	7,471		$	9,133		$	22,976		$	22,216
Natural gas distribution	(6,252		)	(6,852		)	30,248			25,771
Pipeline and midstream	6,378			5,240			13,382			10,699
	7,597			7,521			66,606			58,686
Nonregulated operations:
Pipeline and midstream	742			467			579			288
Construction materials and contracting	29,166			24,336			(5,283		)	815
Construction services	22,845			14,088			42,869			29,179
Other	2,795			(2,337		)	(537		)	(2,932		)
	55,548			36,554			37,628			27,350
Income from continuing operations	63,145			44,075			104,234			86,036
Income (loss) from discontinued operations, net of tax	(1,320		)	(273		)	(1,483		)	203
Net income	$	61,825		$	43,802		$	102,751		$	86,239