Reportable Segments

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements [Abstract]

Reportable Segments

18. Reportable Segments

The Company's primary 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 – Corporate Structure 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 years ended December 31, 2011, 2010 and 2009.

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

			Years Ended December 31,
			2011		2010		2009
			(In thousands)
Operating revenues from external customers:
	Transportation and Storage		$	803,650	$	769,450	$	749,161
	Gathering and Processing			1,179,680		1,008,023		732,251
	Distribution			666,650		698,513		692,904
		Total segment operating revenues		2,649,980		2,475,986		2,174,316
	Corporate and other activities			15,974		13,927		4,702
			$	2,665,954	$	2,489,913	$	2,179,018
Depreciation and amortization:
	Transportation and Storage		$	128,011	$	123,009	$	113,648
	Gathering and Processing			72,756		70,056		66,690
	Distribution			33,445		32,544		31,269
		Total segment depreciation and amortization		234,212		225,609		211,607
	Corporate and other activities			3,478		3,028		2,220
			$	237,690	$	228,637	$	213,827
Earnings (loss) from unconsolidated investments:
	Transportation and Storage		$	97,775	$	99,991	$	75,205
	Gathering and Processing			(248)		4,145		4,410
	Corporate and other activities			1,408		1,279		1,175
			$	98,935	$	105,415	$	80,790
Other income (expense), net:
	Transportation and Storage		$	603	$	(87)	$	1,657
	Gathering and Processing			138		362		(84)
	Distribution			41		(307)		7,447
		Total segment other income (expense), net		782		(32)		9,020
	Corporate and other activities			861		344		12,381
			$	1,643	$	312	$	21,401
			Years Ended December 31,
			2011		2010		2009
			(In thousands)
Segment performance:
	Transportation and Storage EBIT		$	480,775	$	458,273	$	411,935
	Gathering and Processing EBIT			50,666		41,756		(40,470)
	Distribution EBIT			55,364		63,692		67,302
		Total segment EBIT		586,805		563,721		438,767
	Corporate and other activities			(8,369)		2,621		9,513
	Interest expense			219,232		216,665		196,800
	Federal and state income taxes			103,780		107,029		71,900
	Loss from discontinued operations			-		18,100		-
	Net earnings			255,424		224,548		179,580
	Preferred stock dividends			-		5,040		8,683
	Loss on extinguishment of preferred stock			-		3,295		-
		Net earnings available for common stockholders	$	255,424	$	216,213	$	170,897
			December 31,
			2011		2010
			(In thousands)
Total assets:
	Transportation and Storage		$	5,288,967	$	5,224,992
	Gathering and Processing			1,742,516		1,700,598
	Distribution			1,075,253		1,135,352
		Total segment assets		8,106,736		8,060,942
	Corporate and other activities			164,123		177,601
	Total assets		$	8,270,859	$	8,238,543
			Years Ended December 31,
			2011		2010		2009
			(In thousands)
Expenditures for long-lived assets:
	Transportation and Storage		$	101,852	$	145,674	$	247,097
	Gathering and Processing			113,864		95,577		70,221
	Distribution			50,780		41,484		46,090
		Total segment expenditures for long-lived assets		266,496		282,735		363,408
	Corporate and other activities			2,491		4,690		30,141
		Total expenditures for long-lived assets (1)	$	268,987	$	287,425	$	393,549

_______________________

• Related cash impact includes the net reduction in capital accruals totaling $23 million, $9.5 million and$22 millionfor the years ended December 31, 2011, 2010 and 2009, respectively.

Significant Customers and Credit Risk. The following tables provide summary information of significant customers for Panhandle and SUGS by applicable segment and on a consolidated basis for the periods presented. The Distribution segment has no single customer, or group of customers under common control, that accounted for ten percent or more of the Company's Distribution segment or consolidated operating revenues for the periods presented.

	Percent of Transportation and						Percent of Consolidated
	Storage Segment Revenues						Company Total Operating Revenues
	Years Ended December 31,						Years Ended December 31,
	2011		2010		2009		2011		2010		2009
BG LNG Services	30	%	29	%	22	%	9	%	9	%	8	%
ProLiance	13		13		13		4		4		4
Other top 10 customers	21		23		26		6		7		9
Remaining customers	36		35		39		10		11		13
Total percentage	100	%	100	%	100	%	29	%	31	%	34	%
	Percent of Gathering and						Percent of Consolidated
	Processing Segment Revenues						Company Total Operating Revenues
	Years Ended December 31,						Years Ended December 31,
	2011		2010		2009		2011		2010		2009
ConocoPhillips Company (1)	62	%	54	%	7	%	27	%	22	%	2	%
Lone Star NGL Product Services, LLC	12		12		12		5		5		4
Other top 10 customers	20		24		48		9		10		17
Remaining customers	6		10		33		3		5		12
Total percentage	100	%	100	%	100	%	44	%	42	%	35	%

_____________

• For the five-year period ending December 31, 2014, SUGS has contracted to sell its entire owned or controlled output of NGL to Conoco Phillips Company (Conoco). Pricing for the NGL equity volumes sold to Conoco throughout the contract period will be OPIS pricing based at Mont Belvieu, Texas delivery points. SUGS has an option to extend the sales agreement for an additional five-year period.