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REPORTING SEGMENT AND OTHER OPERATIONS DATA
 12 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
REPORTING SEGMENT AND OTHER OPERATIONS DATA
17. REPORTING SEGMENT AND OTHER OPERATIONS DATA

The Company organizes its businesses based on a combination of factors, including its products and its regulatory environment. As a result, the Company manages its businesses through the following reporting segments and other operations: the Natural Gas Distribution segment consists of regulated energy and off-system, capacity and storage management operations; the Clean Energy Ventures segment consists of capital investments in clean energy projects; the Energy Services segment consists of unregulated wholesale and retail energy operations; the Storage and Transportation segment consists of the Company’s investments in natural gas storage and transportation facilities; the Home Services and Other operations consist of heating, cooling and water appliance sales, installations and services, other investments and general corporate activities.

Information related to the Company’s various reporting segments and other operations is detailed below:
(Thousands)
Fiscal Years Ended September 30,202020192018
Operating revenues
Natural Gas Distribution
External customers$729,923 $710,793 $731,865 
Clean Energy Ventures
External customers102,617 98,099 71,375 
Energy Services
External customers (1)
1,029,303 1,734,553 2,064,477 
Intercompany1,116 8,238 48,327 
Storage and Transportation
External customers (1)
42,015 — — 
Intercompany2,713 — — 
Subtotal1,907,687 2,551,683 2,916,044 
Home Services and Other
External customers49,810 48,600 47,392 
Intercompany1,207 2,302 2,665 
Eliminations(5,036)(10,540)(50,992)
Total$1,953,668 $2,592,045 $2,915,109 
Depreciation and amortization
Natural Gas Distribution$71,883 $57,980 $53,208 
Clean Energy Ventures37,855 32,997 31,877 
Energy Services (2)
123 118 76 
Storage and Transportation9,293 6 6 
Subtotal119,154 91,101 85,167 
Home Services and Other1,032 914 780 
Eliminations(292)(285)(246)
Total$119,894 $91,730 $85,701 
Interest income (3)
Natural Gas Distribution$538 $994 $614 
Clean Energy Ventures240 — — 
Energy Services99 78 240 
Storage and Transportation3,510 4,000 3,374 
Subtotal4,387 5,072 4,228 
Home Services and Other8,633 1,942 1,476 
Eliminations(10,061)(5,391)(5,090)
Total$2,959 $1,623 $614 
(1)Includes sales to Canada for the Energy Services segment, which are immaterial.
(2)The amortization of acquired wholesale energy contracts is excluded above and is included in natural gas purchases - nonutility on the Consolidated Statements of Operations.
(3)Included in other income, net on the Consolidated Statements of Operations.
(Thousands)
Fiscal Years Ended September 30,202020192018
Interest expense, net of capitalized interest
Natural Gas Distribution$30,975 $26,134 $25,299 
Clean Energy Ventures20,253 14,846 18,320 
Energy Services3,276 5,205 3,945 
Storage and Transportation13,124 2,185 1,667 
Subtotal67,628 48,370 49,231 
Home Services and Other10,327 1,535 7 
Eliminations(10,358)(2,823)(2,952)
Total$67,597 $47,082 $46,286 
Income tax provision (benefit)
Natural Gas Distribution$27,021 $9,434 $(1,910)
Clean Energy Ventures(32,404)(48,921)(79,932)
Energy Services(3,615)(1,573)24,996 
Storage and Transportation4,247 2,254 (8,548)
Subtotal(4,751)(38,806)(65,394)
Home Services and Other(2,478)1,428 11,944 
Eliminations285 (373)(335)
Total$(6,944)$(37,751)$(53,785)
Equity in earnings of affiliates
Storage and Transportation$15,903 $15,832 $16,165 
Eliminations(1,592)(2,204)(3,157)
Total$14,311 $13,628 $13,008 
Net financial earnings (loss)
Natural Gas Distribution$126,902 $78,062 $84,048 
Clean Energy Ventures53,023 77,473 75,849 
Energy Services(7,873)2,918 60,378 
Storage and Transportation18,311 14,689 24,367 
Subtotal190,363 173,142 244,642 
Home Services and Other5,784 1,911 (3,829)
Eliminations98 (93)(327)
Total$196,245 $174,960 $240,486 
Capital expenditures
Natural Gas Distribution$290,040 $345,004 $254,523 
Clean Energy Ventures133,841 157,828 123,421 
Storage and Transportation20,998 20,616 5,431 
Subtotal444,879 523,448 383,375 
Home Services and Other3,230 2,484 1,213 
Total$448,109 $525,932 $384,588 
Investments in equity investees
Storage and Transportation$2,117 $4,102 $16,151 
Total$2,117 $4,102 $16,151 
The Chief Executive Officer, who uses NFE as a measure of profit or loss in measuring the results of the Company’s reporting segments and operations, is the chief operating decision maker of the Company. A reconciliation of consolidated NFE to consolidated net income is as follows:
(Thousands)202020192018
Consolidated net financial earnings$196,245 $174,960 $240,486 
Less:
Unrealized (gain) loss on derivative instruments and related transactions(9,644)2,881 26,770 
Tax effect2,296 (711)(4,512)
Effects of economic hedging related to natural gas inventory12,690 4,309 (22,570)
Tax effect(3,016)(1,024)7,362 
Consolidated net income$193,919 $169,505 $233,436 

The Company uses derivative instruments as economic hedges of purchases and sales of physical natural gas inventory. For GAAP purposes, these derivatives are recorded at fair value and related changes in fair value are included in reported earnings. Revenues and cost of natural gas related to physical natural gas flow are recognized when the natural gas is delivered to customers. Consequently, there is a mismatch in the timing of earnings recognition between the economic hedges and physical natural gas flows. Timing differences occur in two ways:

•Unrealized gains and losses on derivatives are recognized in reported earnings in periods prior to physical natural gas inventory flows; and

•Unrealized gains and losses of prior periods are reclassified as realized gains and losses when derivatives are settled in the same period as physical natural gas inventory movements occur.

NFE is a measure of the earnings based on eliminating these timing differences, to effectively match the earnings effects of the economic hedges with the physical sale of natural gas, SRECs and foreign currency contracts. Consequently, to reconcile between net income and NFE, current-period unrealized gains and losses on the derivatives are excluded from NFE as a reconciling item. Additionally, realized derivative gains and losses are also included in current-period net income. However, NFE includes only realized gains and losses related to natural gas sold out of inventory, effectively matching the full earnings effects of the derivatives with realized margins on physical natural gas flows. Included in the tax effects are current and deferred income tax expense corresponding with the non-GAAP measure. Also included in the tax effects during fiscal 2018, are the impacts of the Tax Act and resulting revaluation of the deferred income taxes that arose from derivative and hedging activity as measured under NFE. The revaluation caused the effective tax rate on reconciling items to differ from the statutory rate in effect for the year. The Company also calculates a quarterly tax adjustment based on an estimated annual effective tax rate for NFE purposes.

The Company’s assets for the various reporting segments and business operations are detailed below:
(Thousands)202020192018
Assets at end of period:
Natural Gas Distribution$3,531,477 $3,064,309 $2,663,054 
Clean Energy Ventures (1)
1,015,073 864,323 865,018 
Energy Services244,836 290,847 396,852 
Storage and Transportation844,799 240,955 242,069 
Subtotal5,636,185 4,460,434 4,166,993 
Home Services and Other138,375 104,411 114,732 
Intercompany assets (2)
(204,758)(191,860)(138,061)
Total$5,569,802 $4,372,985 $4,143,664 
(1)Includes assets held for sale of $206.9 million for September 30, 2018.
(2)Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.