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Segment Information
12 Months Ended
Sep. 30, 2017
Segment Reporting [Abstract]  
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.