Business segment data

3 Months Ended

Mar. 31, 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 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 segment also 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 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 the 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
	March 31,
	2019			2018
	(In thousands)
External operating revenues:
Regulated operations:
Electric	$	92,566		$	87,404
Natural gas distribution	342,147			332,664
Pipeline and midstream	4,904			4,391
	439,617			424,459
Nonregulated operations:
Pipeline and midstream	3,709			4,442
Construction materials and contracting	227,113			213,284
Construction services	420,733			334,050
Other	19			58
	651,574			551,834
Total external operating revenues	$	1,091,191		$	976,293

Intersegment operating revenues:
Regulated operations:
Electric	$	—		$	—
Natural gas distribution	—			—
Pipeline and midstream	23,922			21,735
	23,922			21,735
Nonregulated operations:
Pipeline and midstream	33			24
Construction materials and contracting	95			101
Construction services	129			11
Other	7,824			2,638
	8,081			2,774
Intersegment eliminations	(32,003		)	(24,509		)
Total intersegment operating revenues	$	—		$	—



	Three Months Ended
	March 31,
	2019			2018
	(In thousands)
Operating income (loss):
Electric	$	17,987		$	18,154
Natural gas distribution	50,317			48,540
Pipeline and midstream	9,904			8,168
Construction materials and contracting	(41,580		)	(26,309		)
Construction services	27,465			20,634
Other	125			189
Total operating income	$	64,218		$	69,376

Net income:
Regulated operations:
Electric	$	15,505		$	13,084
Natural gas distribution	36,500			32,623
Pipeline and midstream	7,004			5,459
	59,009			51,166
Nonregulated operations:
Pipeline and midstream	(163		)	(179		)
Construction materials and contracting	(34,449		)	(23,521		)
Construction services	20,024			15,090
Other	(3,332		)	(596		)
	(17,920		)	(9,206		)
Income from continuing operations	41,089			41,960
Income (loss) from discontinued operations, net of tax	(163		)	477
Net income	$	40,926		$	42,437