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11. Segment Information
 9 Months Ended
Jun. 30, 2011
Segment Reporting Disclosure Abstract  
11. Segment Information

11. Segment Information

 

Through November 30, 2010, our operations were divided into four segments:

 

  • The natural gas distribution segment, which included our regulated natural gas distribution and related sales operations.
  • The regulated transmission and storage segment, which included the regulated pipeline and storage operations of our Atmos Pipeline – Texas Division.
  • The natural gas marketing segment, which included a variety of nonregulated natural gas management services.
  • The pipeline, storage and other segment, which included our nonregulated natural gas gathering transmission and storage services.

 

As a result of the appointment of a new CEO effective October 1, 2010, during the first quarter of fiscal 2011, we revised the information used by the chief operating decision maker to manage the Company. As a result of this change, effective December 1, 2010, we began dividing our operations into the following three segments:

 

  • The natural gas distribution segment, remains unchanged and includes our regulated natural gas distribution and related sales operations.
  • The regulated transmission and storage segment, remains unchanged and includes the regulated pipeline and storage operations of our Atmos Pipeline – Texas Division.
  • The nonregulated segment, is comprised of our nonregulated natural gas management, nonregulated natural gas transmission, storage and other services which were previously reported in the natural gas marketing and pipeline, storage and other segments.

 

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 natural gas distribution segment operations are geographically dispersed, they are reported as a single segment as each natural gas distribution division has similar economic characteristics. The accounting policies of the segments are the same as those described in the summary of significant accounting policies found in our Annual Report on Form 10-K for the fiscal year ended September 30, 2010. We evaluate performance based on net income or loss of the respective operating units.

 

Income statements for the three and nine month periods ended June 30, 2011 and 2010 by segment are presented in the following tables. Prior-year amounts have been restated to reflect the new operating segments.

    Three Months Ended June 30, 2011
    Natural Regulated      
    Gas Transmission      
    Distribution and Storage Nonregulated Eliminations Consolidated
    (In thousands)
                  
Operating revenues from               
 external parties $ 406,817 $ 19,772 $ 417,026 $ - $ 843,615
Intersegment revenues   214   33,798   74,259   (108,271)   -
      407,031   53,570   491,285   (108,271)   843,615
Purchased gas cost   206,839   -   477,880   (107,909)   576,810
 Gross profit   200,192   53,570   13,405   (362)   266,805
Operating expenses               
 Operation and maintenance   86,804   18,786   7,437   (362)   112,665
 Depreciation and amortization   49,099   6,790   1,043   -   56,932
 Taxes, other than income   47,534   3,729   879   -   52,142
 Asset impairments   -   -   10,988   -   10,988
Total operating expenses   183,437   29,305   20,347   (362)   232,727
Operating income (loss)   16,755   24,265   (6,942)   -   34,078
Miscellaneous income (expense)   (1,153)   (312)   168   (133)   (1,430)
Interest charges   28,042   7,653   283   (133)   35,845
Income (loss) from continuing               
 operations before income taxes   (12,440)   16,300   (7,057)   -   (3,197)
Income tax expense (benefit)   (4,311)   5,748   (3,160)   -   (1,723)
Income (loss) from continuing               
 operations   (8,129)   10,552   (3,897)   -   (1,474)
Income from discontinued                
 operations, net of tax   908   -   -   -   908
  Net income (loss) $ (7,221) $ 10,552 $ (3,897) $ - $ (566)
                  
Capital expenditures $ 121,452 $ 20,239 $ 1,929 $ - $ 143,620

    Three Months Ended June 30, 2010
    Natural Regulated      
    Gas Transmission      
    Distribution and Storage Nonregulated Eliminations Consolidated
    (In thousands)
                  
Operating revenues from               
 external parties $ 396,097 $ 22,796 $ 342,412 $ - $ 761,305
Intersegment revenues   222   22,161   84,993   (107,376)   -
      396,319   44,957   427,405   (107,376)   761,305
Purchased gas cost   204,988   -   415,634   (106,983)   513,639
 Gross profit   191,331   44,957   11,771   (393)   247,666
Operating expenses               
 Operation and maintenance   87,323   16,050   8,579   (393)   111,559
 Depreciation and amortization   45,633   5,171   1,136   -   51,940
 Taxes, other than income   47,946   3,010   952   -   51,908
Total operating expenses   180,902   24,231   10,667   (393)   215,407
Operating income   10,429   20,726   1,104   -   32,259
Miscellaneous income (expense)   (72)   94   511   (1,331)   (798)
Interest charges   29,019   7,667   1,912   (1,331)   37,267
Income (loss) from continuing               
 operations before income taxes   (18,662)   13,153   (297)   -   (5,806)
Income tax expense (benefit)   (6,685)   4,688   420   -   (1,577)
Income (loss) from continuing               
 operations   (11,977)   8,465   (717)   -   (4,229)
Income from discontinued                
 operations, net of tax   1,075   -   -   -   1,075
  Net income (loss) $ (10,902) $ 8,465 $ (717) $ - $ (3,154)
                  
Capital expenditures $ 106,394 $ 22,964 $ 362 $ - $ 129,720

    Nine Months Ended June 30, 2011
    Natural Regulated      
    Gas Transmission      
    Distribution and Storage Nonregulated Eliminations Consolidated
    (In thousands)
                  
Operating revenues from               
 external parties $ 2,187,256 $ 62,602 $ 1,308,516 $ - $ 3,558,374
Intersegment revenues   651   94,951   241,940   (337,542)   -
      2,187,907   157,553   1,550,456   (337,542)   3,558,374
Purchased gas cost   1,317,775   -   1,491,815   (336,413)   2,473,177
 Gross profit   870,132   157,553   58,641   (1,129)   1,085,197
Operating expenses               
 Operation and maintenance   268,299   49,591   24,556   (1,129)   341,317
 Depreciation and amortization   145,548   18,387   3,241   -   167,176
 Taxes, other than income   132,070   11,395   2,403   -   145,868
 Asset impairments   -   -   30,270   -   30,270
Total operating expenses   545,917   79,373   60,470   (1,129)   684,631
Operating income (loss)   324,215   78,180   (1,829)   -   400,566
Miscellaneous income   18,305   5,267   764   (290)   24,046
Interest charges   87,344   23,802   1,759   (290)   112,615
Income (loss) from continuing               
 operations before income taxes   255,176   59,645   (2,824)   -   311,997
Income tax expense (benefit)   94,323   21,252   (1,364)   -   114,211
Income (loss) from continuing               
 operations   160,853   38,393   (1,460)   -   197,786
Income from discontinued                
 operations, net of tax   7,854   -   -   -   7,854
  Net income (loss) $ 168,707 $ 38,393 $ (1,460) $ - $ 205,640
                  
Capital expenditures $ 340,713 $ 44,796 $ 4,774 $ - $ 390,283

    Nine Months Ended June 30, 2010
    Natural Regulated      
    Gas Transmission      
    Distribution and Storage Nonregulated Eliminations Consolidated
    (In thousands)
Operating revenues from               
 external parties $ 2,511,350 $ 64,281 $ 1,365,623 $ - $ 3,941,254
Intersegment revenues   682   82,717   286,830   (370,229)   -
      2,512,032   146,998   1,652,453   (370,229)   3,941,254
Purchased gas cost   1,657,412   -   1,556,746   (369,017)   2,845,141
 Gross profit   854,620   146,998   95,707   (1,212)   1,096,113
Operating expenses               
 Operation and maintenance   266,847   53,877   28,946   (1,212)   348,458
 Depreciation and amortization   137,580   15,395   3,226   -   156,201
 Taxes, other than income   140,234   9,226   3,380   -   152,840
Total operating expenses   544,661   78,498   35,552   (1,212)   657,499
Operating income    309,959   68,500   60,155   -   438,614
Miscellaneous income               
 (expense)   1,474   117   1,524   (4,020)   (905)
Interest charges   87,877   23,589   8,035   (4,020)   115,481
Income from continuing               
 operations before income taxes   223,556   45,028   53,644   -   322,228
Income tax expense   86,552   16,039   21,608   -   124,199
Income from continuing               
 operations   137,004   28,989   32,036   -   198,029
Income from discontinued                
 operations, net of tax   6,273   -   -   -   6,273
  Net income $ 143,277 $ 28,989 $ 32,036 $ - $ 204,302
                  
Capital expenditures $ 302,621 $ 56,786 $ 2,942 $ - $ 362,349

Balance sheet information at June 30, 2011 and September 30, 2010 by segment is presented to reflect our business structure as of June 30, 2011 in the following tables. Prior-year amounts have been restated accordingly.

 

    June 30, 2011
    Natural Regulated      
    Gas Transmission      
    Distribution and Storage Nonregulated Eliminations Consolidated
    (In thousands)
ASSETS               
Property, plant and               
 equipment, net $ 4,085,081 $ 771,777 $ 59,193 $ - $ 4,916,051
Investment in subsidiaries   671,885   -   (2,096)   (669,789)   -
Current assets               
 Cash and cash equivalents   39,446   -   77,983   -   117,429
 Assets from risk               
  management activities   1,972   -   13,041   -   15,013
 Other current assets   565,265   15,822   469,576   (193,357)   857,306
 Intercompany receivables   505,709   -   -   (505,709)   -
  Total current assets   1,112,392   15,822   560,600   (699,066)   989,748
Intangible assets   -   -   363   -   363
Goodwill   572,262   132,341   34,711   -   739,314
Noncurrent assets from risk               
 management activities   767   -   16   -   783
Deferred charges and other               
 assets   319,019   16,137   12,055   -   347,211
    $ 6,761,406 $ 936,077 $ 664,842 $ (1,368,855) $ 6,993,470
                  
CAPITALIZATION AND               
 LIABILITIES          
Shareholders' equity $ 2,335,824 $ 251,080 $ 420,805 $ (671,885) $ 2,335,824
Long-term debt   2,205,910   -   196   -   2,206,106
  Total capitalization   4,541,734   251,080   421,001   (671,885)   4,541,930
Current liabilities               
 Current maturities of               
  long-term debt   2,303   -   131   -   2,434
 Short-term debt   173,845   -   -   (173,845)   -
 Liabilities from risk               
  management activities   5,207   -   2,995   -   8,202
 Other current liabilities   419,848   8,862   226,352   (17,416)   637,646
 Intercompany payables   -   503,857   1,852   (505,709)   -
  Total current liabilities   601,203   512,719   231,330   (696,970)   648,282
Deferred income taxes   798,433   163,540   5,634   -   967,607
Noncurrent liabilities from               
 risk management activities   56   -   6,089   -   6,145
Regulatory cost of removal               
 obligation   396,201   -   -   -   396,201
Deferred credits and other               
 liabilities   423,779   8,738   788   -   433,305
    $ 6,761,406 $ 936,077 $ 664,842 $ (1,368,855) $ 6,993,470

    September 30, 2010
    Natural Regulated      
    Gas Transmission      
    Distribution and Storage Nonregulated Eliminations Consolidated
    (In thousands)
ASSETS               
Property, plant and               
 equipment, net $ 3,959,112 $ 748,947 $ 85,016 $ - $ 4,793,075
Investment in subsidiaries   620,863   -   (2,096)   (618,767)   -
Current assets               
 Cash and cash equivalents   31,952   -   100,000   -   131,952
 Assets from risk               
  management activities   2,219   -   18,356   -   20,575
 Other current assets   528,655   19,504   325,348   (150,842)   722,665
 Intercompany receivables   546,313   -   -   (546,313)   -
  Total current assets   1,109,139   19,504   443,704   (697,155)   875,192
Intangible assets   -   -   834   -   834
Goodwill   572,262   132,341   34,711   -   739,314
Noncurrent assets from risk               
 management activities   47   -   890   -   937
Deferred charges and other               
 assets   324,707   13,037   16,695   -   354,439
    $ 6,586,130 $ 913,829 $ 579,754 $ (1,315,922) $ 6,763,791
                  
CAPITALIZATION AND               
 LIABILITIES          
Shareholders' equity $ 2,178,348 $ 212,687 $ 408,176 $ (620,863) $ 2,178,348
Long-term debt   1,809,289   -   262   -   1,809,551
  Total capitalization   3,987,637   212,687   408,438   (620,863)   3,987,899
Current liabilities               
 Current maturities of               
  long-term debt   360,000   -   131   -   360,131
 Short-term debt   258,488   -   -   (132,388)   126,100
 Liabilities from risk               
  management activities   48,942   -   731   -   49,673
 Other current liabilities   473,076   10,949   162,508   (16,358)   630,175
 Intercompany payables   -   543,007   3,306   (546,313)   -
  Total current liabilities   1,140,506   553,956   166,676   (695,059)   1,166,079
Deferred income taxes   691,126   142,337   (4,335)   -   829,128
Noncurrent liabilities from               
 risk management activities   2,924   -   6,000   -   8,924
Regulatory cost of removal               
 obligation   350,521   -   -   -   350,521
Deferred credits and other               
 liabilities   413,416   4,849   2,975   -   421,240
    $ 6,586,130 $ 913,829 $ 579,754 $ (1,315,922) $ 6,763,791