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Discontinued Operations and Disposal Groups | 9 Months Ended
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Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Disposal Groups, Including Discontinued Operations, Disclosure | Discontinued operations On May 31, 2023, the Company completed the previously announced separation of Knife River, its former construction materials and contracting segment, into a new publicly traded company. The separation was achieved through the Company's pro-rata distribution of approximately 90 percent of the outstanding shares of Knife River to the Company's common stockholders. To effect the separation, the Company distributed to its stockholders one share of Knife River common stock for every four shares of the Company's common stock held on May 22, 2023, the record date for the distribution, with the Company retaining approximately 10 percent, or 5.7 million shares of Knife River common stock immediately following the separation. The Company intends to dispose of the retained shares within twelve months after the separation. As a result of the separation, the historical assets and liabilities for Knife River have been classified as assets and liabilities of discontinued operations and the historical results of operations are shown in Discontinued operations, net of tax, other than allocated general corporate overhead costs of the Company, which do not meet the criteria for income (loss) from discontinued operations. The Company’s consolidated financial statements and accompanying notes for prior periods have been restated. For the comparative periods, Knife River's operations are only reflected through May 2023, whereas 2022 includes the full three and nine months from Knife River's operations. On April 25, 2023, Knife River issued $425 million of senior notes, pursuant to an indenture, due 2031 to qualified institutional buyers. Knife River also entered into a new credit agreement which provided a revolving credit facility in an initial amount of up to $350 million and a senior secured term loan facility in an amount up to $275 million. The net proceeds from the notes offering, revolving credit facility and the term loan were used to repay $825 million of Knife River's intercompany obligations owed to Centennial. Centennial used the entirety of these proceeds from Knife River to repay a portion of its existing third-party indebtedness. As a result of the separation, the Company retained legal ownership of 538,921 shares of the Company's common stock that were historically owned by a subsidiary of Knife River and recorded in Treasury stock at cost. Following the separation, the 538,921 treasury shares were retired. The Company will provide to Knife River and Knife River will provide to the Company transition services in accordance with the TSA entered into on May 31, 2023. For the three and nine months ended September 30, 2023, the Company received $1.3 million and $1.9 million; and paid $407,000 and $684,000, respectively, for these related activities. The majority of the transition services are expected to be provided for a period of one year, however, no longer than two years after the separation. Separation related costs of $1.0 million and $47.1 million, net of tax, were incurred during the three and nine months ended September 30, 2023, respectively. Separation costs incurred are presented in income (loss) from discontinued operations in the Consolidated Statements of Income. These charges primarily relate to transaction and third-party support costs, one-time business separation fees and related tax charges. The Company had no assets or liabilities related to the discontinued operations of Knife River on its balance sheet as of September 30, 2023. The carrying amounts of the major classes of assets and liabilities of discontinued operations included in the Company’s Consolidated Balance Sheets were as follows:
| September 30, 2022 | December 31, 2022
Assets | (In Thousands)
Current assets: |  |
Cash and cash equivalents | $ | 16,761 |  | $ | 10,090 |
Receivables, net | 447,882 |  | 241,302 |
Inventories | 308,829 |  | 323,277 |
Prepayments and other current assets | 16,949 |  | 17,848 |
Total current assets of discontinued operations | 790,421 |  | 592,517 |
Noncurrent assets: |  |
Net property, plant and equipment | 1,275,649 |  | 1,315,213 |
Goodwill | 274,302 |  | 274,540 |
Other intangible assets, net | 14,097 |  | 13,430 |
Investments | 32,326 |  | 33,086 |
Operating lease right-of-use assets | 43,431 |  | 45,872 |
Other | 3,233 |  | 3,610 |
Total noncurrent assets of discontinued operations | 1,643,038 |  | 1,685,751 |
Total assets of discontinued operations | $ | 2,433,459 |  | $ | 2,278,268 |
Liabilities |  |
Current liabilities: |  |
Short-term borrowings | $ | 100,000 |  | $ | 208,000 |
Long-term debt due within one year | 128,133 |  | 30,211 |
Accounts payable | 178,320 |  | 131,608 |
Taxes payable | 12,874 |  | 8,502 |
Accrued compensation | 27,383 |  | 29,192 |
Operating lease liabilities due within one year | 13,000 |  | 13,210 |
Other accrued liabilities | 73,852 |  | 76,200 |
Total current liabilities of discontinued operations | 533,562 |  | 496,923 |
Noncurrent liabilities: |  |
Long-term debt | 581,588 |  | 445,546 |
Deferred income taxes | 175,529 |  | 175,804 |
Asset retirement obligations | 27,964 |  | 33,015 |
Operating lease liabilities | 30,431 |  | 32,663 |
Other | 87,159 |  | 78,876 |
Total noncurrent liabilities of discontinued operations | 902,671 |  | 765,904 |
Total liabilities of discontinued operations | $ | 1,436,233 |  | $ | 1,262,827 |
The reconciliation of the major classes of income and expense constituting pretax income (loss) from discontinued operations to the after-tax income (loss) from discontinued operations on the Consolidated Statements of Income were as follows:
| Three Months Ended | Nine Months Ended
| September 30, | September 30,
| 2023 | 2022 | 2023 | 2022
| (In thousands)
Operating revenues | $ | — |  | $ | 974,774 |  | $ | 735,259 |  | $ | 1,995,500 |
Operating expenses | 1,447 |  | 825,874 |  | 769,407 |  | 1,828,602 |
Operating income (loss) | (1,447) |  | 148,900 |  | (34,148) |  | 166,898 |
Other income (expense) | — |  | (1,005) |  | 2,382 |  | (4,399) |
Interest expense | (66) |  | 11,173 |  | 37,545 |  | 26,466 |
Income (loss) from discontinued operations before income taxes | (1,381) |  | 136,722 |  | (69,311) |  | 136,033 |
Income taxes | 1,908 |  | 31,120 |  | (3,559) |  | 32,529 |
Discontinued operations, net of tax | $ | (3,289) |  | $ | 105,602 |  | $ | (65,752) |  | $ | 103,504 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent + Details
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