Segment Information

12 Months Ended

Dec. 31, 2012

Segment Information

Note 14 - Segment Information

Company operating segments are determined based on the nature of their activities. The natural gas operations segment is engaged in the business of purchasing, distributing, and transporting natural gas. Revenues are generated from the distribution and transportation of natural gas. The construction services segment is primarily engaged in the business of providing utility companies with trenching and installation, replacement, and maintenance services for energy distribution systems.

The accounting policies of the reported segments are the same as those described within Note 1 – Summary of Significant Accounting Policies. NPL accounts for the services provided to Southwest at contractual (market) prices at contract inception. Accounts receivable for these services, which are not eliminated during consolidation, are presented in the table below (in thousands).

	December 31, 2012		December 31, 2011
Accounts receivable for NPL services	$	8,179	$	6,205

The financial information pertaining to the natural gas operations and construction services segments for each of the three years in the period ended December 31, 2012 is as follows (thousands of dollars):

2012	Gas Operations		Construction Services		Total
Revenues from unaffiliated customers	$	1,321,728	$	522,676	$	1,844,404
Intersegment sales		—		83,374		83,374
Total	$	1,321,728	$	606,050	$	1,927,778
Interest revenue	$	915	$	9	$	924
Interest expense	$	66,957	$	1,063	$	68,020
Depreciation and amortization	$	186,035	$	37,387	$	223,422
Income tax expense	$	64,973	$	10,303	$	75,276
Segment net income	$	116,619	$	16,712	$	133,331
Segment assets	$	4,204,948	$	283,109	$	4,488,057
Capital expenditures	$	308,951	$	86,761	$	395,712

2011	Gas Operations		Construction Services		Total
Revenues from unaffiliated customers	$	1,403,366	$	391,701	$	1,795,067
Intersegment sales		—		92,121		92,121
Total	$	1,403,366	$	483,822	$	1,887,188
Interest revenue	$	465	$	20	$	485
Interest expense	$	68,777	$	825	$	69,602
Depreciation and amortization	$	175,253	$	25,216	$	200,469
Income tax expense	$	49,576	$	13,727	$	63,303
Segment net income	$	91,420	$	20,867	$	112,287
Segment assets	$	4,048,613	$	227,394	$	4,276,007
Capital expenditures	$	305,542	$	75,449	$	380,991

2010	Gas Operations		Construction Services		Total
Revenues from unaffiliated customers	$	1,511,907	$	257,213	$	1,769,120
Intersegment sales		—		61,251		61,251
Total	$	1,511,907	$	318,464	$	1,830,371
Interest revenue	$	158	$	36	$	194
Interest expense	$	77,025	$	564	$	77,589
Depreciation and amortization	$	170,456	$	20,007	$	190,463
Income tax expense	$	47,073	$	7,852	$	54,925
Segment net income	$	91,382	$	12,495	$	103,877
Segment assets	$	3,845,111	$	139,082	$	3,984,193
Capital expenditures	$	188,379	$	27,060	$	215,439