Segment Information |
Segment Information As of September 30, 2017, we manage and review our consolidated operations through the following three reportable segments: | | • | The distribution segment is primarily comprised of our regulated natural gas distribution and related sales operations in eight states. |
| | • | The pipeline and storage segment is comprised primarily of the pipeline and storage operations of our Atmos Pipeline-Texas division and our natural gas transmission operations in Louisiana. |
| | • | The natural gas marketing segment is comprised of our discontinued natural gas marketing business. |
Our determination of reportable segments considers the strategic operating units under which we manage sales of various products and services to customers in differing regulatory environments. Although our distribution segment operations are geographically dispersed, they are aggregated and reported as a single segment as each natural gas distribution division has similar economic characteristics. In addition, because the pipeline and storage operations of our Atmos Pipeline-Texas division and our natural gas transmission operations in Louisiana have similar economic characteristics, they have been aggregated and reported as a single segment. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. We evaluate performance based on net income or loss of the respective operating units. We allocate interest and pension expense to the pipeline and storage segment; however, there is no debt or pension liability recorded on the pipeline and storage segment balance sheet. All material intercompany transactions have been eliminated; however, we have not eliminated intercompany profits when such amounts are probable of recovery under the affiliates’ rate regulation process. Income taxes are allocated to each segment as if each segment’s taxes were calculated on a separate return basis. Summarized income statements and capital expenditures by segment are shown in the following tables. | | | | | | | | | | | | | | | | | | | | | | Year Ended September 30, 2017 | | Distribution | | Pipeline and Storage | | Natural Gas Marketing | | Eliminations | | Consolidated | | (In thousands) | Operating revenues from external parties | $ | 2,647,813 |
| | $ | 111,922 |
| | $ | — |
| | $ | — |
| | $ | 2,759,735 |
| Intersegment revenues | 1,362 |
| | 345,108 |
| | — |
| | (346,470 | ) | | — |
| Total operating revenues | 2,649,175 |
| | 457,030 |
| | — |
| | (346,470 | ) | | 2,759,735 |
| Purchased gas cost | 1,269,456 |
| | 2,506 |
| | — |
| | (346,426 | ) | | 925,536 |
| Operation and maintenance expense | 413,077 |
| | 133,765 |
| | — |
| | (44 | ) | | 546,798 |
| Depreciation and amortization expense | 249,071 |
| | 70,377 |
| | — |
| | — |
| | 319,448 |
| Taxes, other than income | 211,929 |
| | 28,478 |
| | — |
| | — |
| | 240,407 |
| Operating income | 505,642 |
| | 221,904 |
| | — |
| | — |
| | 727,546 |
| Miscellaneous expense | (1,695 | ) | | (1,575 | ) | | — |
| | — |
| | (3,270 | ) | Interest charges | 79,789 |
| | 40,393 |
| | — |
| | — |
| | 120,182 |
| Income from continuing operations before income taxes | 424,158 |
| | 179,936 |
| | — |
| | — |
| | 604,094 |
| Income tax expense | 155,789 |
| | 65,594 |
| | — |
| | — |
| | 221,383 |
| Income from continuing operations | 268,369 |
| | 114,342 |
| | — |
| | — |
| | 382,711 |
| Income from discontinued operations, net of tax | — |
| | — |
| | 10,994 |
| | — |
| | 10,994 |
| Gain on sale of discontinued operations, net of tax | — |
| | — |
| | 2,716 |
| | — |
| | 2,716 |
| Net income | $ | 268,369 |
| | $ | 114,342 |
| | $ | 13,710 |
| | $ | — |
| | $ | 396,421 |
| Capital expenditures | $ | 849,950 |
| | $ | 287,139 |
| | $ | — |
| | $ | — |
| | $ | 1,137,089 |
|
| | | | | | | | | | | | | | | | | | | | | | Year Ended September 30, 2016 | | Distribution | | Pipeline and Storage | | Natural Gas Marketing | | Eliminations | | Consolidated | | (In thousands) | Operating revenues from external parties | $ | 2,338,404 |
| | $ | 116,244 |
| | $ | — |
| | $ | — |
| | $ | 2,454,648 |
| Intersegment revenues | 1,374 |
| | 310,952 |
| | — |
| | (312,326 | ) | | — |
| Total operating revenues | 2,339,778 |
| | 427,196 |
| | — |
| | (312,326 | ) | | 2,454,648 |
| Purchased gas cost | 1,058,576 |
| | (58 | ) | | — |
| | (312,326 | ) | | 746,192 |
| Operation and maintenance expense | 407,982 |
| | 130,610 |
| | — |
| | — |
| | 538,592 |
| Depreciation and amortization expense | 234,109 |
| | 56,682 |
| | — |
| | — |
| | 290,791 |
| Taxes, other than income | 197,227 |
| | 24,616 |
| | — |
| | — |
| | 221,843 |
| Operating income | 441,884 |
| | 215,346 |
| | — |
| | — |
| | 657,230 |
| Miscellaneous income (expense) | 1,171 |
| | (1,405 | ) | | — |
| | — |
| | (234 | ) | Interest charges | 78,238 |
| | 36,574 |
| | — |
| | — |
| | 114,812 |
| Income from continuing operations before income taxes | 364,817 |
| | 177,367 |
| | — |
| | — |
| | 542,184 |
| Income tax expense | 130,987 |
| | 65,655 |
| | — |
| | — |
| | 196,642 |
| Income from continuing operations | 233,830 |
| | 111,712 |
| | — |
| | — |
| | 345,542 |
| Income from discontinued operations, net of tax | — |
| | — |
| | 4,562 |
| | — |
| | 4,562 |
| Net income | $ | 233,830 |
| | $ | 111,712 |
| | $ | 4,562 |
| | $ | — |
| | $ | 350,104 |
| Capital expenditures | $ | 740,246 |
| | $ | 346,383 |
| | $ | 321 |
| | $ | — |
| | $ | 1,086,950 |
|
| | | | | | | | | | | | | | | | | | | | | | Year Ended September 30, 2015 | | Distribution | | Pipeline and Storage | | Natural Gas Marketing | | Eliminations | | Consolidated | | (In thousands) | Operating revenues from external parties | $ | 2,819,977 |
| | $ | 107,008 |
| | $ | — |
| | $ | — |
| | $ | 2,926,985 |
| Intersegment revenues | 1,385 |
| | 277,949 |
| | — |
| | (279,334 | ) | | — |
| Total operating revenues | 2,821,362 |
| | 384,957 |
| | — |
| | (279,334 | ) | | 2,926,985 |
| Purchased gas cost | 1,574,447 |
| | 562 |
| | — |
| | (279,334 | ) | | 1,295,675 |
| Operation and maintenance expense | 393,504 |
| | 122,902 |
| | — |
| | — |
| | 516,406 |
| Depreciation and amortization expense | 224,094 |
| | 48,314 |
| | — |
| | — |
| | 272,408 |
| Taxes, other than income | 206,625 |
| | 23,639 |
| | — |
| | — |
| | 230,264 |
| Operating income | 422,692 |
| | 189,540 |
| | — |
| | — |
| | 612,232 |
| Miscellaneous income (expense) | 284 |
| | (1,103 | ) | | — |
| | — |
| | (819 | ) | Interest charges | 83,087 |
| | 33,154 |
| | — |
| | — |
| | 116,241 |
| Income from continuing operations before income taxes | 339,889 |
| | 155,283 |
| | — |
| | — |
| | 495,172 |
| Income tax expense | 134,069 |
| | 55,480 |
| | — |
| | — |
| | 189,549 |
| Income from continuing operations | 205,820 |
| | 99,803 |
| | — |
| | — |
| | 305,623 |
| Income from discontinued operations, net of tax | — |
| | — |
| | 9,452 |
| | — |
| | 9,452 |
| Net income | $ | 205,820 |
| | $ | 99,803 |
| | $ | 9,452 |
| | $ | — |
| | $ | 315,075 |
| Capital expenditures | $ | 670,620 |
| | $ | 292,775 |
| | $ | 226 |
| | $ | — |
| | $ | 963,621 |
|
The following table summarizes our revenues from external parties by products and services for the fiscal year ended September 30. | | | | | | | | | | | | | | 2017 | | 2016 | | 2015 | | (In thousands) | Distribution revenues: | | | | | | Gas sales revenues: | | | | | | Residential | $ | 1,642,918 |
| | $ | 1,477,049 |
| | $ | 1,761,689 |
| Commercial | 708,167 |
| | 619,979 |
| | 772,187 |
| Industrial | 133,372 |
| | 98,439 |
| | 131,034 |
| Public authority and other | 45,820 |
| | 41,307 |
| | 53,401 |
| Total gas sales revenues | 2,530,277 |
| | 2,236,774 |
| | 2,718,311 |
| Transportation revenues | 86,332 |
| | 76,690 |
| | 72,340 |
| Other gas revenues | 31,204 |
| | 24,940 |
| | 29,326 |
| Total distribution revenues | 2,647,813 |
| | 2,338,404 |
| | 2,819,977 |
| Pipeline and storage revenues | 111,922 |
| | 116,244 |
| | 107,008 |
| Total operating revenues | $ | 2,759,735 |
| | $ | 2,454,648 |
| | $ | 2,926,985 |
|
Balance sheet information at September 30, 2017 and 2016 by segment is presented in the following tables. | | | | | | | | | | | | | | | | | | | | | | September 30, 2017 | | Distribution | | Pipeline and Storage | | Natural Gas Marketing | | Eliminations | | Consolidated | | (In thousands) | Property, plant and equipment, net | $ | 6,849,517 |
| | $ | 2,409,665 |
| | $ | — |
| | $ | — |
| | $ | 9,259,182 |
| Total assets | $ | 10,050,164 |
| | $ | 2,621,601 |
| | $ | — |
| | $ | (1,922,169 | ) | | $ | 10,749,596 |
| Deferred income tax liabilities | $ | 1,271,808 |
| | $ | 606,891 |
| | $ | — |
| | $ | — |
| | $ | 1,878,699 |
|
| | | | | | | | | | | | | | | | | | | | | | September 30, 2016 | | Distribution | | Pipeline and Storage | | Natural Gas Marketing | | Eliminations | | Consolidated | | (In thousands) | Property, plant and equipment, net(1) | $ | 6,208,465 |
| | $ | 2,060,141 |
| | $ | — |
| | $ | — |
| | $ | 8,268,606 |
| Total assets | $ | 9,321,815 |
| | $ | 2,283,864 |
| | $ | 216,715 |
| | $ | (1,811,505 | ) | | $ | 10,010,889 |
| Deferred income tax liabilities | $ | 1,055,348 |
| | $ | 543,390 |
| | $ | 4,318 |
| | $ | — |
| | $ | 1,603,056 |
|
| | (1) | Natural gas marketing had net property, plant and equipment of $11.9 million classified as assets held for sale on the consolidated balance sheet at September 30, 2016. |
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