Business segment data

12 Months Ended

Dec. 31, 2017

Business Segment Data

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. For information on the Company's natural gas and oil gathering and processing facility sold on January 1, 2017, see Note 2.

The construction materials and contracting segment operations mine, process and sell construction aggregates (crushed stone, sand and gravel); produce and sell asphalt mix; and supply ready-mixed concrete. This segment focuses on vertical integration of construction services 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 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. Its inside services include design, construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, and mechanical piping and services. This business also designs, constructs and maintains renewable energy projects. These specialty contracting services are provided to utilities and large manufacturing, commercial, industrial, institutional and government customers.

The Other category includes the activities of Centennial Capital, which 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 deductible self-insured layers of the insured companies' general liability, automobile liability, pollution liability and other coverages. Centennial Capital also owns certain real and personal property. The Other category also includes certain general and administrative costs (reflected in operation and maintenance expense) and interest expense which were previously allocated to the refining business and Fidelity and do not meet the criteria for income (loss) from discontinued operations. The Other category also includes Centennial Resources' former investment in Brazil.

Discontinued operations includes the results and supporting activities of Dakota Prairie Refining and Fidelity other than certain general and administrative costs and interest expense as described above. Dakota Prairie Refining refined crude oil and produced and sold diesel fuel, naphtha, ATBs and other by-products of the production process. In the second quarter of 2016, the Company sold all of the outstanding membership interests in Dakota Prairie Refining. Fidelity engaged in oil and natural gas development and production activities in the Rocky Mountain and Mid-Continent/Gulf States regions of the United States. Between September 2015 and March 2016, the Company entered into purchase and sale agreements to sell substantially all of Fidelity's oil and natural gas assets. The completion of these sales occurred between October 2015 and April 2016. For more information on discontinued operations, see Note 2.

The information below follows the same accounting policies as described in Note 1. Information on the Company's segments as of December 31 and for the years then ended was as follows:



	2017			2016			2015
				(In thousands)
External operating revenues:
Regulated operations:
Electric	$	342,805		$	322,356		$	280,615
Natural gas distribution	848,388			766,115			817,419
Pipeline and midstream	53,566			52,983			51,004
	1,244,759			1,141,454			1,149,038
Nonregulated operations:
Pipeline and midstream	19,602			39,602			54,281
Construction materials and contracting	1,811,964			1,873,696			1,901,530
Construction services	1,366,317			1,072,663			907,767
Other	709			1,413			1,436
	3,198,592			2,987,374			2,865,014
Total external operating revenues	$	4,443,351		$	4,128,828		$	4,014,052

Intersegment operating revenues:
Regulated operations:
Electric	$	—		$	—		$	—
Natural gas distribution	—			—			—
Pipeline and midstream	48,867			48,794			49,065
	48,867			48,794			49,065
Nonregulated operations:
Pipeline and midstream	178			223			554
Construction materials and contracting	565			574			2,752
Construction services	1,285			609			18,660
Other	7,165			7,230			7,755
	9,193			8,636			29,721
Intersegment eliminations	(58,060		)	(57,430		)	(78,786		)
Total intersegment operating revenues	$	—		$	—		$	—

Depreciation, depletion and amortization:
Electric	$	47,715		$	50,220		$	37,583
Natural gas distribution	69,381			65,426			64,756
Pipeline and midstream	16,788			24,885			27,981
Construction materials and contracting	55,862			58,413			65,937
Construction services	15,739			15,307			13,420
Other	2,001			2,067			2,070
Total depreciation, depletion and amortization	$	207,486		$	216,318		$	211,747

Interest expense:
Electric	$	25,377		$	24,982		$	17,421
Natural gas distribution	31,234			30,405			29,471
Pipeline and midstream	4,990			7,903			9,895
Construction materials and contracting	14,778			15,265			15,183
Construction services	3,742			4,059			3,959
Other	3,564			5,854			15,853
Intersegment eliminations	(897		)	(620		)	(603		)
Total interest expense	$	82,788		$	87,848		$	91,179



	2017			2016			2015
				(In thousands)

Income taxes:
Electric	$	7,699		$	1,449		$	11,523
Natural gas distribution	22,756			9,181			11,377
Pipeline and midstream	12,281			12,408			7,505
Construction materials and contracting	5,405			60,625			41,619
Construction services	25,558			17,748			16,432
Other	(1,809		)	(2,028		)	(9,834		)
Intersegment eliminations	(6,849		)	(6,251		)	(7,958		)
Total income taxes	$	65,041		$	93,132		$	70,664

Earnings (loss) on common stock:
Regulated operations:
Electric	$	49,366		$	42,222		$	35,914
Natural gas distribution	32,225			27,102			23,607
Pipeline and midstream	20,620			22,060			20,680
	102,211			91,384			80,201
Nonregulated operations:
Pipeline and midstream	(127		)	1,375			(7,430		)
Construction materials and contracting	123,398			102,687			89,096
Construction services	53,306			33,945			23,762
Other	(1,422		)	(3,231		)	(14,941		)
	175,155			134,776			90,487
Intersegment eliminations (a)	6,849			6,251			5,016
Earnings on common stock before loss from discontinued operations	284,215			232,411			175,704
Loss from discontinued operations, net of tax (a)	(3,783		)	(300,354		)	(834,080		)
Loss from discontinued operations attributable to noncontrolling interest	—			(131,691		)	(35,256		)
Total earnings (loss) on common stock	$	280,432		$	63,748		$	(623,120	)

Capital expenditures:
Electric	$	109,107		$	111,134		$	332,876
Natural gas distribution	146,981			126,272			130,793
Pipeline and midstream	31,054			34,467			18,315
Construction materials and contracting	44,302			37,845			48,126
Construction services	18,630			60,344			38,269
Other	1,850			2,358			3,755
Total capital expenditures (b)	$	351,924		$	372,420		$	572,134

Assets:
Electric (c)	$	1,470,922		$	1,406,694		$	1,325,858
Natural gas distribution (c)	2,201,081			2,099,296			2,038,433
Pipeline and midstream	566,295			550,615			591,651
Construction materials and contracting	1,238,696			1,220,459			1,261,963
Construction services	591,382			513,093			442,845
Other (d)	261,419			283,255			287,940
Assets held for sale	4,871			211,055			616,464
Total assets	$	6,334,666		$	6,284,467		$	6,565,154



	2017		2016		2015
			(In thousands)

Property, plant and equipment:
Electric (c)	$	1,982,264	$	1,888,613	$	1,786,148
Natural gas distribution (c)	2,319,845		2,179,413		2,076,581
Pipeline and midstream	700,284		672,199		758,729
Construction materials and contracting	1,560,048		1,549,375		1,553,428
Construction services	177,265		171,361		163,279
Other	31,123		49,268		49,537
Less accumulated depreciation, depletion and amortization	2,691,641		2,578,902		2,489,322
Net property, plant and equipment	$	4,079,188	$	3,931,327	$	3,898,380


(a)	Includes eliminations for the presentation of income tax adjustments between continuing and discontinued operations.


(b)	Capital expenditures for 2017, 2016 and 2015 include noncash capital expenditure-related accounts payable and AFUDC, totaling $10.5 million, $(15.8) million and $35.3 million, respectively.


(c)	Includes allocations of common utility property.


(d)	Includes assets not directly assignable to a business (i.e. cash and cash equivalents, certain accounts receivable, certain investments and other miscellaneous current and deferred assets).