The following information highlights the key growth strategies, projections and certain assumptions for this segment:
- In February, the company and Calumet Refining, LLC signed a letter of intent to explore the feasibility of jointly building and operating a 20,000 barrel per day diesel topping plant in southwestern North Dakota. The facility would process Bakken crude and market the diesel within the Bakken region. Site selection, permitting, crude oil feed procurement, marketing and engineering studies are currently underway.
- The company has recently seen an uptick in natural gas moving to storage and expects average balances for the remainder of the year to be comparable to last year. The divestment and/or curtailment of certain natural gas properties and the deferral of certain gas development activity are expected to result in gathering volumes being lower in 2012 compared to last year. The decline is expected to be partially offset by higher transportation volumes related to growth projects placed in service in the Bakken area.
- The company continues to pursue expansion of facilities and services offered to customers. Energy development within its geographic region, which includes portions of Colorado, Wyoming, Montana and North Dakota, is expanding, most notably the Bakken of North Dakota and eastern Montana. The company owns an extensive natural gas pipeline system in the Bakken area. Ongoing energy development is expected to have many direct and indirect benefits to this business.
- Installation of additional compression at the Charbonneau station was completed and placed into service in September, providing additional firm capacity for producers in the Bakken production area. With some additional modifications, this project has the potential of adding a total of 27 MMcf of firm capacity.
- Construction has begun on approximately 13 miles of high pressure transmission pipeline from the Stateline processing facilities in northwestern North Dakota to deliver gas into the Northern Border Pipeline. The project is expected to be completed by mid 2012.
|Construction Materials and Contracting|
|Three Months Ended|
|(Dollars in millions)|
|Operation and maintenance||157.0||146.8|
|Depreciation, depletion and amortization||19.8||21.5|
|Taxes, other than income||8.0||7.7|
|Ready-mixed concrete (cubic yards)||468||397|
|Three Months Ended|
|Operation and maintenance||187.9||184.9|
|Depreciation, depletion and amortization||2.8||2.9|
|Taxes, other than income||7.8||7.7|
The combined construction businesses reported a first quarter loss of $13.5 million, compared to a loss of $16.8 million a year ago. The decreased loss reflects a $6.8 million earnings increase at the services group that resulted from higher workloads and margins in the Central and Western regions and higher equipment sales and rental and Mountain region margins. Partially offsetting the service group's increased earnings was a seasonal loss at the materials group including lower aggregate margins and volumes. In addition, the construction businesses on a combined basis had an increase in income taxes primarily related to the absence of an income tax benefit of $2.5 million related to favorable resolution of certain income tax matters in 2011.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts