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REPORTING SEGMENT AND OTHER OPERATIONS DATA
 6 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
REPORTING SEGMENT AND OTHER OPERATIONS DATA
14. 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: Natural Gas Distribution consists of regulated energy and off-system, capacity and storage management operations; Clean Energy Ventures consists of capital investments in clean energy projects; Energy Services consists of unregulated wholesale and retail energy operations; Storage and Transportation consists of the Company’s investments in natural gas transportation and storage facilities; the Home Services and Other business 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:
Three Months EndedSix Months Ended
March 31,March 31,
(Thousands)2023202220232022
Operating revenues
Natural Gas Distribution
External customers$400,500 $463,474 $757,909 $737,909 
Intercompany338 338 675 675 
Clean Energy Ventures
External customers14,406 11,827 27,198 22,010 
Energy Services
External customers (1)
196,553 411,069 509,952 776,857 
Intercompany177 1,576 8,560 5,032 
Storage and Transportation
External customers19,303 12,805 45,017 24,389 
Intercompany1,584 537 2,708 1,096 
Subtotal632,861 901,626 1,352,019 1,567,968 
Home Services and Other
External customers13,265 13,141 27,518 26,993 
Intercompany183 81 196 180 
Eliminations(2,282)(2,532)(12,139)(6,983)
Total$644,027 $912,316 $1,367,594 $1,588,158 
Depreciation and amortization
Natural Gas Distribution$25,319 $23,344 $50,209 $46,237 
Clean Energy Ventures6,465 5,311 12,041 10,544 
Energy Services (2)
62 32 119 60 
Storage and Transportation6,020 2,571 11,962 4,704 
Subtotal37,866 31,258 74,331 61,545 
Home Services and Other224 203 442 407 
Eliminations— (26)— (124)
Total$38,090 $31,435 $74,773 $61,828 
Interest income (3)
Natural Gas Distribution$376 $191 $789 $384 
Energy Services380 — 649 — 
Storage and Transportation1,684 381 3,085 758 
Subtotal2,440 572 4,523 1,142 
Home Services and Other734 147 1,388 302 
Eliminations(938)(231)(1,716)(455)
Total$2,236 $488 $4,195 $989 
(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 Unaudited Condensed Consolidated Statements of Operations.
(3)Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations.
Three Months EndedSix Months Ended
March 31,March 31,
(Thousands)2023202220232022
Interest expense, net of capitalized interest
Natural Gas Distribution$13,879 $10,764 $27,588 $21,759 
Clean Energy Ventures7,316 5,395 13,211 10,822 
Energy Services2,749 795 5,807 1,470 
Storage and Transportation6,128 1,847 12,835 3,983 
Subtotal30,072 18,801 59,441 38,034 
Home Services and Other189 125 311 369 
Total$30,261 $18,926 $59,752 $38,403 
Income tax provision (benefit)
Natural Gas Distribution$23,924 $29,689 $38,307 $42,893 
Clean Energy Ventures(3,005)(1,952)(4,842)(3,998)
Energy Services5,916 (790)25,980 19,715 
Storage and Transportation596 714 2,539 1,057 
Subtotal27,431 27,661 61,984 59,667 
Home Services and Other488 256 705 502 
Eliminations2,667 893 875 (552)
Total$30,586 $28,810 $63,564 $59,617 
Equity in earnings of affiliates
Storage and Transportation$977 $1,256 $1,886 $2,312 
Eliminations154 (487)191 (968)
Total$1,131 $769 $2,077 $1,344 
Net financial earnings (loss)
Natural Gas Distribution$100,697 $102,783 $155,361 $153,863 
Clean Energy Ventures(9,379)(6,491)(12,961)(13,312)
Energy Services21,125 29,940 73,658 47,507 
Storage and Transportation2,450 4,625 8,693 7,587 
Subtotal114,893 130,857 224,751 195,645 
Home Services and Other813 451 784 898 
Eliminations(3,396)(1,102)(2,941)(567)
Total$112,310 $130,206 $222,594 $195,976 
Capital expenditures
Natural Gas Distribution$92,600 $52,000 $174,671 $125,464 
Clean Energy Ventures13,706 41,176 57,699 66,556 
Storage and Transportation10,122 43,673 29,841 109,048 
Subtotal116,428 136,849 262,211 301,068 
Home Services and Other760 163 900 242 
Total$117,188 $137,012 $263,111 $301,310 
Return of capital from equity investees
Storage and Transportation$— $(4,000)$— $(4,000)
Total$— $(4,000)$— $(4,000)
The Company's assets for the various reporting segments and business operations are detailed below:
(Thousands)March 31,
2023		September 30,
2022
Assets at end of period:
Natural Gas Distribution$4,194,970 $4,030,686 
Clean Energy Ventures1,056,744 1,015,065 
Energy Services167,876 333,064 
Storage and Transportation1,007,694 999,520 
Subtotal6,427,284 6,378,335 
Home Services and Other153,914 159,068 
Intercompany assets (1)
(285,065)(275,987)
Total$6,296,133 $6,261,416 
(1)Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.

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:
Three Months EndedSix Months Ended
March 31,March 31,
(Thousands)2023202220232022
Net financial earnings$112,310 $130,206 $222,594 $195,976 
Less:
Unrealized loss (gain) on derivative instruments and related transactions13,971 42,022 (17,532)(40,169)
Tax effect(3,320)(9,980)4,167 9,556 
Effects of economic hedging related to natural gas inventory(11,203)1,155 12,769 24,732 
Tax effect2,662 (274)(3,035)(5,877)
Gain on equity method investment(200)— (200)— 
Tax effect50 — 50 — 
NFE tax adjustment103 1,248 207 387 
Net income$110,247 $96,035 $226,168 $207,347 

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. 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. NFE also excludes certain transactions associated with equity method investments, including impairment charges, which are non-cash charges, and return of capital in excess of the carrying value of our investment. These are considered unusual in nature and occur infrequently such that they are not indicative of the Company's performance for its ongoing operations. Included in the tax effects are current and deferred income tax expense corresponding with the components of NFE. The Company also calculates a quarterly tax adjustment based on an estimated annual effective tax rate for NFE purposes.