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REPORTING SEGMENT AND OTHER OPERATIONS DATA
 9 Months Ended
Jun. 30, 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 EndedNine Months Ended
June 30,June 30,
(Thousands)2023202220232022
Operating revenues
Natural Gas Distribution
External customers$144,971 $199,357 $902,880 $937,266 
Intercompany337 338 1,012 1,013 
Clean Energy Ventures
External customers13,178 13,795 40,376 35,805 
Energy Services
External customers (1)
69,542 309,236 579,494 1,086,093 
Intercompany630 (1,421)9,190 3,611 
Storage and Transportation
External customers21,435 15,779 66,452 40,168 
Intercompany766 611 3,474 1,707 
Subtotal250,859 537,695 1,602,878 2,105,663 
Home Services and Other
External customers14,949 14,168 42,467 41,161 
Intercompany6 52 202 232 
Eliminations(1,739)420 (13,878)(6,563)
Total$264,075 $552,335 $1,631,669 $2,140,493 
Depreciation and amortization
Natural Gas Distribution$25,825 $23,951 $76,034 $70,188 
Clean Energy Ventures6,672 5,358 18,713 15,902 
Energy Services (2)
51 34 170 94 
Storage and Transportation6,102 3,323 18,064 8,027 
Subtotal38,650 32,666 112,981 94,211 
Home Services and Other227 207 669 614 
Eliminations— (1)— (125)
Total$38,877 $32,872 $113,650 $94,700 
Interest income (3)
Natural Gas Distribution$496 $250 $1,285 $634 
Energy Services310 — 959 — 
Storage and Transportation1,841 501 4,926 1,259 
Subtotal2,647 751 7,170 1,893 
Home Services and Other753 225 2,141 527 
Eliminations(1,010)(292)(2,726)(747)
Total$2,390 $684 $6,585 $1,673 
(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 EndedNine Months Ended
June 30,June 30,
(Thousands)2023202220232022
Interest expense, net of capitalized interest
Natural Gas Distribution$13,226 $11,474 $40,814 $33,233 
Clean Energy Ventures7,848 5,510 21,059 16,332 
Energy Services2,467 1,115 8,274 2,585 
Storage and Transportation6,430 3,177 19,265 7,160 
Subtotal29,971 21,276 89,412 59,310 
Home Services and Other148 135 459 504 
Total$30,119 $21,411 $89,871 $59,814 
Income tax provision (benefit)
Natural Gas Distribution$196 $1,508 $38,503 $44,401 
Clean Energy Ventures(18,237)(1,526)(23,079)(5,524)
Energy Services(2,934)2,338 23,046 22,053 
Storage and Transportation535 1,675 3,074 2,732 
Subtotal(20,440)3,995 41,544 63,662 
Home Services and Other429 180 1,134 682 
Eliminations(494)259 381 (293)
Total$(20,505)$4,434 $43,059 $64,051 
Equity in earnings of affiliates
Storage and Transportation$377 $5,274 $2,263 $7,586 
Eliminations324 (473)515 (1,441)
Total$701 $4,801 $2,778 $6,145 
Net financial earnings (loss)
Natural Gas Distribution$891 $2,648 $156,252 $156,511 
Clean Energy Ventures7,267 (5,098)(5,694)(18,410)
Energy Services(1,604)(5,003)72,054 42,504 
Storage and Transportation2,358 3,526 11,051 11,113 
Subtotal8,912 (3,927)233,663 191,718 
Home Services and Other523 215 1,307 1,113 
Eliminations235 161 (2,706)(406)
Total$9,670 $(3,551)$232,264 $192,425 
Capital expenditures
Natural Gas Distribution$102,555 $79,976 $277,226 $205,440 
Clean Energy Ventures10,905 38,948 68,604 105,504 
Storage and Transportation3,450 20,560 33,291 129,608 
Subtotal116,910 139,484 379,121 440,552 
Home Services and Other193 320 1,093 562 
Total$117,103 $139,804 $380,214 $441,114 
Return of capital from equity investees
Storage and Transportation$— $(1,479)$— $(5,479)
Total$— $(1,479)$— $(5,479)
The Company's assets for the various reporting segments and business operations are detailed below:
(Thousands)June 30,
2023		September 30,
2022
Assets at end of period:
Natural Gas Distribution$4,239,231 $4,030,686 
Clean Energy Ventures1,091,029 1,015,065 
Energy Services126,903 333,064 
Storage and Transportation1,004,129 999,520 
Subtotal6,461,292 6,378,335 
Home Services and Other151,430 159,068 
Intercompany assets (1)
(300,142)(275,987)
Total$6,312,580 $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 EndedNine Months Ended
June 30,June 30,
(Thousands)2023202220232022
Net financial earnings (loss)$9,670 $(3,551)$232,264 $192,425 
Less:
Unrealized gain on derivative instruments and related transactions(12,970)(17,891)(30,502)(58,060)
Tax effect3,083 4,253 7,250 13,809 
Effects of economic hedging related to natural gas inventory24,116 428 36,885 25,160 
Tax effect(5,731)(102)(8,766)(5,979)
Gain on equity method investment(100)(4,021)(300)(4,021)
Tax effect24 1,003 74 1,003 
NFE tax adjustment(284)(274)(77)113 
Net income$1,532 $13,053 $227,700 $220,400 

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.