Business Segments

3 Months Ended

Jan. 31, 2015

Segment Reporting [Abstract]

Business Segments

Business Segments

We have three reportable business segments, regulated utility, regulated non-utility, and unregulated non-utility activities. Our segments are identified based on products and services, regulatory environments and our current corporate organization and business decision-making activities. The regulated utility segment is the gas distribution business, where we include the operations of merchandising and its related service work and home service agreements, with activities conducted by the parent company. Although the operations of our regulated utility segment are located in three states under the jurisdiction of individual state regulatory commissions, the operations are managed as one unit having similar economic and risk characteristics within one company.

Operations of our regulated non-utility activities segment are comprised of our equity method investments in joint ventures with regulated activities that are held by our wholly-owned subsidiaries. Operations of our unregulated non-utility activities segment are comprised primarily of our equity method investment in a joint venture with unregulated activities that is held by a wholly-owned subsidiary; activities of our other minor subsidiaries are also included.

Operations of the regulated utility segment are reflected in “Operating Income” in the Condensed Consolidated Statements of Comprehensive Income. Operations of the regulated non-utility activities and unregulated non-utility activities segments are included in the Condensed Consolidated Statements of Comprehensive Income in “Other Income (Expense)” in “Income from equity method investments” and “Non-operating income.”

Our chief operating decision maker is the executive management team. We produce consolidated financial information internally that is supplemented with separate non-utility activity reporting that is used regularly to make operating decisions and assess performance of our three business segments. We evaluate the performance of the regulated utility segment based on margin, operations and maintenance expenses and operating income. We evaluate the performance of the regulated and unregulated non-utility activities segments based on earnings from our cash flows in the ventures.

The basis of segmentation and the basis of the measurement of segment profit or loss are the same as reported in the consolidated financial statements in our Form 10-K for the year ended October 31, 2014. The information for 2014 has been recasted to align with management's view of the non-utility activities.

Operations by segment for the three months ended January 31, 2015 and 2014 are presented below.

	Regulated Utility				Regulated Non-Utility Activities						Unregulated Non-Utility Activities						Total
In thousands	2015		2014		2015			2014			2015			2014			2015		2014
Three Months
Revenues from external customers	$	607,271	$	657,733	$	—		$	—		$	—		$	—		$	607,271	$	657,733
Margin	270,070		261,512		—			—			—			—			270,070		261,512
Operations and maintenance
expenses	66,150		60,639		31			6			38			23			66,219		60,668
Income from equity method
investments	—		—		3,771			3,107			4,494			6,834			8,265		9,941
Operating income (loss) before
income taxes	162,030		162,121		(31		)	(7		)	(121		)	(102		)	161,878		162,012
Income before income taxes	144,401		151,269		3,740			3,101			4,373			6,732			152,514		161,102

Reconciliations to the condensed consolidated statements of comprehensive income for the three months ended January 31, 2015 and 2014 are presented below.

	Three Months
In thousands	2015			2014
Operating Income:
Segment operating income before income taxes	$	161,878		$	162,012
Utility income taxes	(56,272		)	(59,802		)
Regulated non-utility activities operating loss before income taxes	31			7
Unregulated non-utility activities operating loss before income taxes	121			102
Operating income	$	105,758		$	102,319

Net Income:
Income before income taxes for reportable segments	$	152,514		$	161,102
Income taxes	(59,536		)	(63,530		)
Total	$	92,978		$	97,572