Business Segments

9 Months Ended

Jul. 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 Operations and Comprehensive Income. Operations of the regulated non-utility activities and unregulated non-utility activities segments are included in the Condensed Consolidated Statements of Operations and 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 recast to align with management's view of the non-utility activities.

Operations by segment for the three months and nine months ended July 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	$	158,266		$	164,187		$	—		$	—		$	—		$	—		$	158,266		$	164,187
Margin	111,572			104,847			—			—			—			—			111,572			104,847
Operations and maintenance expenses	69,587			68,605			19			9			49			47			69,655			68,661
Income from equity method investments	—			—			3,894			3,253			1,907			1,790			5,801			5,043
Operating loss before income taxes	(1,864		)	(3,070		)	(89		)	(59		)	(68		)	(67		)	(2,021		)	(3,196		)
Income (loss) before income taxes	(18,904		)	(16,867		)	3,805			3,194			1,839			1,723			(13,260		)	(11,950		)
Nine Months
Revenues from external customers	$	1,190,462		$	1,284,167		$	—		$	—		$	—		$	—		$	1,190,462		$	1,284,167
Margin	607,263			577,882			—			—			—			—			607,263			577,882
Operations and maintenance expenses	207,162			199,437			70			23			96			79			207,328			199,539
Income from equity method investments	—			—			11,242			8,828			18,666			20,517			29,908			29,345
Operating income (loss) before income taxes	271,697			262,540			(140		)	(74		)	(203		)	(186		)	271,354			262,280
Income before income taxes	218,414			223,401			11,102			8,754			18,464			20,331			247,980			252,486

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

	Three Months						Nine Months
In thousands	2015			2014			2015			2014
Operating Income (Loss):
Segment operating income (loss) before income taxes	$	(2,021	)	$	(3,196	)	$	271,354		$	262,280
Utility income taxes	7,097			6,324			(85,583		)	(89,668		)
Regulated non-utility activities operating loss before income taxes	89			59			140			74
Unregulated non-utility activities operating loss before income taxes	68			67			203			186
Operating income	$	5,233		$	3,254		$	186,114		$	172,872

Net Income (Loss):
Income (loss) before income taxes for reportable segments	$	(13,260	)	$	(11,950	)	$	247,980		$	252,486
Income taxes	5,000			4,606			(96,860		)	(99,718		)
Total	$	(8,260	)	$	(7,344	)	$	151,120		$	152,768