Business Segments

9 Months Ended

Jul. 31, 2016

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 and cash flows from 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, 2015.

Operations by segment for the three months and nine months ended July 31, 2016 and 2015 are presented below.

	Regulated Utility						Regulated Non-Utility Activities						Unregulated Non-Utility Activities						Total
In thousands	2016			2015			2016			2015			2016			2015			2016			2015
Three Months
Revenues from external customers	$	157,806		$	158,266		$	—		$	—		$	—		$	—		$	157,806		$	158,266
Margin	114,771			111,572			—			—			—			—			114,771			111,572
Operations and maintenance expenses	68,867			69,587			16			19			58			49			68,941			69,655
Income from equity method investments	—			—			1,229			3,894			3,009			1,907			4,238			5,801
Operating income (loss) before income taxes	316			(1,864		)	(121		)	(89		)	(76		)	(68		)	119			(2,021		)
Income (loss) before income taxes	(15,233		)	(18,904		)	1,108			3,805			2,932			1,839			(11,193		)	(13,260		)
Nine Months
Revenues from external customers	$	969,329		$	1,190,462		$	—		$	—		$	—		$	—		$	969,329		$	1,190,462
Margin	625,385			607,263			—			—			—			—			625,385			607,263
Operations and maintenance expenses	215,675			207,162			49			70			126			96			215,850			207,328
Income from equity method investments	—			—			9,495			11,242			18,530			18,666			28,025			29,908
Operating income (loss) before income taxes	275,587			271,697			(154		)	(140		)	(232		)	(203		)	275,201			271,354
Income before income taxes	225,601			218,414			9,341			11,102			18,299			18,464			253,241			247,980

Reconciliations to the condensed consolidated statements of operations and comprehensive income for the three months and nine months ended July 31, 2016 and 2015 are presented below.

	Three Months					Nine Months
In thousands	2016		2015			2016			2015
Operating Income (Loss):
Segment operating income (loss) before income taxes	$	119	$	(2,021	)	$	275,201		$	271,354
Utility income taxes	6,339		7,097			(87,660		)	(85,583		)
Regulated non-utility activities operating loss before income taxes	121		89			154			140
Unregulated non-utility activities operating loss before income taxes	76		68			232			203
Operating income	$	6,655	$	5,233		$	187,927		$	186,114

Net Income (Loss):
Income (loss) before income taxes for reportable segments	$	(11,193	)	$	(13,260	)	$	253,241		$	247,980
Income taxes	4,463			5,000			(98,749		)	(96,860		)
Total	$	(6,730	)	$	(8,260	)	$	154,492		$	151,120