Segment Information

9 Months Ended

Sep. 30, 2011

Notes To Financial Statements [Abstract]

Segment Information

Note 10 - Segment Information

We generate nearly all our operating revenues through the sale, distribution, transportation and storage of natural gas. Our operating segments comprise revenue-generating components of our company for which we produce separate information, internally, that we regularly use to make operating decisions and assess performance. 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. We manage our businesses through four operating segments – distribution operations, retail energy operations, wholesale services and energy investments and a nonoperating corporate segment.

Our distribution operations segment is the largest component of our business and includes natural gas local distribution utilities in six states - Florida, Georgia, Maryland, New Jersey, Tennessee and Virginia. These utilities construct, manage and maintain intrastate natural gas pipelines and distribution facilities. Although the operations of our distribution operations segment are geographically dispersed, the operating subsidiaries within the distribution operations segment are regulated utilities, with rates determined by individual state regulatory commissions. These natural gas distribution utilities have similar economic and risk characteristics.

We are also involved in several related and complementary businesses. Our retail energy operations segment includes retail natural gas marketing to end-use customers primarily in Georgia. Our wholesale services segment includes natural gas asset management and related logistics activities for each of our utilities as well as for nonaffiliated companies, natural gas storage arbitrage and related activities. Our energy investments segment includes a number of aggregated businesses that are related and complementary to our primary business. The most significant is the development and operation of high-deliverability natural gas storage assets. Our corporate segment includes intercompany eliminations and aggregated subsidiaries that are not significant enough on a stand-alone basis to warrant treatment as an operating segment, and that do not fit into one of our four operating segments.

We evaluate segment performance based primarily on the non-GAAP measure of EBIT, which includes the effects of corporate expense allocations. EBIT includes operating income and other income and expenses. Items we do not include in EBIT are financing costs, including interest and debt expense and income taxes, each of which we evaluate on a consolidated level. We believe EBIT is a useful measurement of our performance because it provides information that can be used to evaluate the effectiveness of our businesses from an operational perspective, exclusive of the costs to finance those activities and exclusive of income taxes, neither of which is directly relevant to the efficiency of those operations.

You should not consider EBIT an alternative to, or a more meaningful indicator of, our operating performance than operating income or net income as determined in accordance with GAAP. In addition, our EBIT may not be comparable to a similarly titled measure of another company.

Following are the reconciliations of EBIT to operating income, (loss) earnings before income taxes and net (loss) income for the periods presented.

	Three months ended September 30,		Nine months ended September 30,
In millions	2011	2010	2011	2010
Operating income	$24	$62	$322	$363
Other income	1	(1)	4	1
EBIT	25	61	326	364
Interest expense, net	31	27	92	81
(Loss) earnings before income taxes	(6)	34	234	283
Income tax (benefit) expense	(2)	13	85	103
Net (loss) income	$(4)	$21	$149	$180

Information by segment on our Statements of Financial Position as of December 31, 2010, is as follows:

In millions	Identifiable and total assets (1)	Goodwill
Distribution operations	$5,498	$404
Retail energy operations	259	0
Wholesale services	1,326	0
Energy investments	479	14
Corporate (2)	(42)	0
Consolidated	$7,520	$418

(1) Identifiable assets are those assets used in each segment’s operations.

(2) Our corporate segments assets consist primarily of cash and cash equivalents and property, plant and equipment and reflect the effect of intercompany eliminations.

Summarized Statements of Income, Statements of Financial Position and capital expenditure information by segment as of and for the periods presented are shown in the following tables.

Three months ended September 30, 2011

In millions	Distribution operations	Retail energy operations	Wholesale services	Energy investments	Corporate and intercompany eliminations (3)	Consolidated AGL Resources Inc.
Operating revenues from external parties	$206	$98	$(21)	$11	$1	$295
Intercompany revenues (1)	34	0	0	0	(34)	0
Total operating revenues	240	98	(21)	11	(33)	295
Operating expenses
Cost of gas	47	87	8	2	(32)	112
Operation and maintenance	78	15	7	5	0	105
Depreciation and amortization	38	1	0	2	2	43
Taxes other than income taxes	9	0	1	0	1	11
Total operating expenses	172	103	16	9	(29)	271
Operating income (loss)	68	(5)	(37)	2	(4)	24
Other income (expense)	2	0	0	0	(1)	1
EBIT	$70	$(5)	$(37)	$2	$(5)	$25
Capital expenditures	$82	$1	$0	$6	$7	$96

Three months ended September 30, 2010

In millions	Distribution operations	Retail energy operations	Wholesale services	Energy investments	Corporate and intercompany eliminations (3)	Consolidated AGL Resources Inc.
Operating revenues from external parties	$204	$101	$32	$8	$1	$346
Intercompany revenues (1)	34	0	0	0	(34)	0
Total operating revenues	238	101	32	8	(33)	346
Operating expenses
Cost of gas	55	91	6	2	(34)	120
Operation and maintenance	85	18	12	3	(4)	114
Depreciation and amortization	35	1	0	2	2	40
Taxes other than income taxes	8	0	0	0	2	10
Total operating expenses	183	110	18	7	(34)	284
Operating income (loss)	55	(9)	14	1	1	62
Other income (expense)	0	0	1	0	(2)	(1)
EBIT	$55	$(9)	$15	$1	$(1)	$61
Capital expenditures	$90	$1	$0	$26	$4	$121

Nine months ended September 30, 2011

In millions	Distribution operations	Retail energy operations	Wholesale services	Energy investments	Corporate and intercompany eliminations (3)	Consolidated AGL Resources Inc.
Operating revenues from external parties	$948	$505	$41	$51	$3	$1,548
Intercompany revenues (1)	113	0	0	0	(113)	0
Total operating revenues	1,061	505	41	51	(110)	1,548
Operating expenses
Cost of gas	385	388	12	25	(109)	701
Operation and maintenance	257	50	35	13	8	363
Depreciation and amortization	109	2	1	7	7	126
Taxes other than income taxes	27	1	2	2	4	36
Total operating expenses	778	441	50	47	(90)	1,226
Operating income (loss)	283	64	(9)	4	(20)	322
Other income	4	0	0	0	0	4
EBIT	$287	$64	$(9)	$4	$(20)	$326
Identifiable and total assets (2)	$5,687	$182	$1,004	$472	$114	$7,459
Goodwill	$404	$0	$0	$14	$0	$418
Capital expenditures	$249	$2	$1	$21	$19	$292

Nine months ended September 30, 2010

In millions	Distribution operations	Retail energy operations	Wholesale services	Energy investments	Corporate and intercompany eliminations (3)	Consolidated AGL Resources Inc.
Operating revenues from external parties	$958	$611	$91	$45	$3	$1,708
Intercompany revenues (1)	106	0	0	0	(106)	0
Total operating revenues	1,064	611	91	45	(103)	1,708
Operating expenses
Cost of gas	419	487	15	15	(104)	832
Operation and maintenance	258	55	36	18	(9)	358
Depreciation and amortization	103	2	1	5	8	119
Taxes other than income taxes	27	1	2	2	4	36
Total operating expenses	807	545	54	40	(101)	1,345
Operating income (loss)	257	66	37	5	(2)	363
Other income (expense)	3	0	1	(1)	(2)	1
EBIT	$260	$66	$38	$4	$(4)	$364
Identifiable and total assets (2)	$5,304	$175	$1,028	$460	$(91)	$6,876
Goodwill	$404	$0	$0	$14	$0	$418
Capital expenditures	$252	$2	$1	$102	$13	$370

(1) Intercompany revenues - wholesale services records its energy marketing and risk management revenues on a net basis, which includes intercompany revenues of $118 million and $367 million for the three and nine months ended September 30, 2011 and $79 million and $351 million for the three and nine months ended September 30, 2010.

(2) Identifiable assets are those used in each segments operations.

(3) Our corporate segments assets consist primarily of cash and cash equivalents, property, plant and equipment and reflect the effect of intercompany eliminations.