Reportable Segments

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements [Abstract]

Reportable Segments

13. Reportable Segments

The Company's operating segments, which are individually disclosed as its reportable business segments, are: Transportation and Storage, Gathering and Processing, and Distribution. These operating segments are organized for segment reporting purposes based on the way internal managerial reporting presents the results of the Company's various businesses to its chief operating decision maker for use in determining the performance of the businesses.

The Transportation and Storage segment operations are conducted through Panhandle and the Company's investment in Citrus. The Gathering and Processing segment operations are conducted through SUGS. The Distribution segment is primarily engaged in the local distribution of natural gas in Missouri and Massachusetts, through its Missouri Gas Energy and New England Gas Company operating divisions, respectively. See Note 1 – Description of Business for additional information associated with the Company's reportable segments.

The remainder of the Company's business operations, which do not meet the quantitative threshold for segment reporting, are presented as Corporate and other activities. Corporate and other activities consist of unallocated corporate costs, a wholly-owned subsidiary with ownership interests in electric power plants, and other miscellaneous activities.

The Company evaluates operational and financial segment performance based on several factors, of which the primary financial measure is EBIT, a non-GAAP measure. The Company defines EBIT as Net earnings available for common stockholders, adjusted for the following:

• items that do not impact net earnings, such as extraordinary items, discontinued operations and the impact of changes in accounting principles;
• income taxes;
• interest;
• dividends on preferred stock; and
• loss on extinguishment of preferred stock.

EBIT may not be comparable to measures used by other companies and should be considered in conjunction with net earnings and other performance measures such as operating income or net cash flows provided by operating activities.

Sales of products or services between segments are billed at regulated rates or at market rates, as applicable. There were no material intersegment revenues during the three- and six-month periods ended June 30, 2011 and 2010.

The following tables set forth certain selected financial information for the Company's segments for the periods presented or at the dates indicated.

				Three Months Ended				Six Months Ended
				June 30,				June 30,
				2011		2010		2011		2010
				(In thousands)
Operating revenues from external customers:
	Transportation and Storage			$	189,760	$	187,090	$	392,054	$	373,765
	Gathering and Processing				328,515		282,707		552,167		543,567
	Distribution				109,076		99,711		425,649		407,972
		Total segment operating revenues			627,351		569,508		1,369,870		1,325,304
	Corporate and other activities				4,256		3,588		8,559		6,786
				$	631,607	$	573,096	$	1,378,429	$	1,332,090
Depreciation and amortization:
	Transportation and Storage			$	31,963	$	30,896	$	64,237	$	60,073
	Gathering and Processing				18,065		17,971		35,852		35,291
	Distribution				8,407		7,967		16,814		15,923
		Total segment depreciation and amortization			58,435		56,834		116,903		111,287
	Corporate and other activities				860		725		1,719		1,466
				$	59,295	$	57,559	$	118,622	$	112,753
Earnings from unconsolidated investments:
	Transportation and Storage			$	24,852	$	25,748	$	50,883	$	42,994
	Gathering and Processing				(158)		1,395		30		2,380
	Corporate and other activities				354		399		836		746
				$	25,048	$	27,542	$	51,749	$	46,120
Segment performance:
	Transportation and Storage EBIT			$	117,495	$	111,246	$	239,593	$	213,671
	Gathering and Processing EBIT				21,333		40,526		9,104		47,081
	Distribution EBIT				3,374		6,865		26,941		35,710
		Total segment EBIT			142,202		158,637		275,638		296,462
	Corporate and other activities				(1,908)		297		(469)		617
	Interest expense				54,933		55,436		110,504		106,312
	Federal and state income taxes				25,588		28,609		44,230		59,418
	Net earnings				59,773		74,889		120,435		131,349
	Preferred stock dividends				-		2,170		-		4,341
	Loss on extinguishment of preferred stock				-		3,295		-		3,295
		Net earnings available for common
			stockholders	$	59,773	$	69,424	$	120,435	$	123,713
				June 30,		December 31,
				2011		2010
				(In thousands)
Total assets:
	Transportation and Storage			$	5,281,414	$	5,224,992
	Gathering and Processing				1,740,188		1,700,598
	Distribution				989,680		1,135,352
		Total segment assets			8,011,282		8,060,942
	Corporate and other activities				178,787		177,601
	Total assets			$	8,190,069	$	8,238,543
				Three Months Ended				Six Months Ended
				June 30,				June 30,
				2011		2010		2011		2010
				(In thousands)
Expenditures for long-lived assets:
	Transportation and Storage			$	28,911	$	25,886	$	39,169	$	56,257
	Gathering and Processing				20,903		15,823		56,513		41,706
	Distribution				13,447		9,151		20,409		16,255
		Total segment expenditures for long-lived
			assets		63,261		50,860		116,091		114,218
	Corporate and other activities				1,321		4,166		1,904		6,281
		Total expenditures for long-lived assets (1)		$	64,582	$	55,026	$	117,995	$	120,499

_______________________

• Related cash impact includes the net reduction in capital accruals totaling $10.4million and $7.9million for the three-month periods ended June 30, 2011 and 2010, respectively. Related cash impact includes the net reduction in capital accruals totaling $26 million and $(7.9)million for the six-month periods ended June 30, 2011 and 2010, respectively.