Note 13 - Segment Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 13 - Segment Information

Our reportable segments comprise revenue-generating components of our company for which we produce separate financial 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 reportable segments - distribution operations, retail operations, wholesale services, midstream operations. Our non-reportable segments are combined and presented as “other segments”.

Effective September 1, 2014, we closed on the sale of Tropical Shipping, which historically operated within our cargo shipping segment. The assets and liabilities of these businesses are classified as held for sale on the Consolidated Statements of Financial Position, and the financial results of these businesses as of December 31, 2013 are reflected as discontinued operations on the Consolidated Statements of Income. Amounts shown in this note, unless otherwise indicated, exclude assets held for sale and discontinued operations. Cargo shipping also included our investment in Triton, which was not part of the sale and has been reclassified to a non-reportable segment. See Note 14 for additional information.

Our distribution operations segment is the largest component of our business and includes natural gas local distribution utilities in seven states. 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 operations segment includes retail natural gas marketing to end-use customers primarily in Georgia and Illinois. Additionally, retail operations provides home protection products and services. Our wholesale services segment engages in natural gas storage and gas pipeline arbitrage and related activities. Additionally, they provide natural gas asset management and/or related logistics services for each of our utilities except Nicor Gas, as well as for non-affiliated companies. Our midstream operations segment includes our non-utility storage and pipeline operations, including the operation of high-deliverability natural gas storage assets. Our “other” non-reportable segments include subsidiaries that individually are not significant on a stand-alone basis and that do not fit into one of our reportable segments.

The chief operating decision maker of the company is the Chairman, President and Chief Executive Officer, who utilizes EBIT as the primary measure of profit and loss in assessing the results of each segment’s operations. EBIT includes operating income and other income and expenses. Items we do not include in EBIT are income taxes and financing costs, including interest expense, each of which we evaluate on a consolidated basis. Summarized Statements of Income, Statements of Financial Position and capital expenditure information by segment as of and for the years ended December 31, 2014, 2013 and 2012 are shown in the following tables.

2014

In millions	Distribution operations		Retail operations		Wholesale services (1)			Midstream operations			Other (2)			Intercompany eliminations			Consolidated
Operating revenues from external parties	$	3,802	$	994	$	578		$	88		$	7		$	(84	)	$	5,385
Intercompany revenues		199		-		-			-			-			(199	)		-
Total operating revenues		4,001		994		578			88			7			(283	)		5,385
Operating expenses
Cost of goods sold		2,223		683		77			57			-			(275	)		2,765
Operation and maintenance		699		147		75			26			-			(8	)		939
Depreciation and amortization		317		28		1			18			16			-			380
Taxes other than income taxes		189		4		3			6			6			-			208
Total operating expenses		3,428		862		156			107			22			(283	)		4,292
Gain (loss) on disposition of assets		-		-		3			-			(1	)		-			2
Operating income (loss)		573		132		425			(19	)		(16	)		-			1,095
Other income (expense)		8		-		(3	)		2			7			-			14
EBIT	$	581	$	132	$	422		$	(17	)	$	(9	)	$	-		$	1,109
Identifiable and total assets (3)	$	12,041	$	670	$	1,402		$	694		$	9,723		$	(9,621	)	$	14,909
Capital expenditures	$	715	$	11	$	2		$	15		$	26		$	-		$	769

2013

In millions	Distribution operations		Retail operations		Wholesale services (1)			Midstream operations			Other (2)			Intercompany eliminations			Consolidated
Operating revenues from external parties	$	3,230	$	858	$	60		$	74		$	8		$	(21	)	$	4,209
Intercompany revenues		182		-		-			-			-			(182	)		-
Total operating revenues		3,412		858		60			74			8			(203	)		4,209
Operating expenses
Cost of goods sold		1,687		564		21			33			-			(195	)		2,110
Operation and maintenance		687		132		49			24			3			(8	)		887
Depreciation and amortization		339		27		1			17			13			-			397
Taxes other than income taxes		167		3		3			5			9			-			187
Total operating expenses		2,880		726		74			79			25			(203	)		3,581
Gain on disposition of assets		-		-		11			-			-			-			11
Operating income (loss)		532		132		(3	)		(5	)		(17	)		-			639
Other income (expense)		14		-		-			(5	)		7			-			16
EBIT	$	546	$	132	$	(3	)	$	(10	)	$	(10	)	$	-		$	655
Identifiable and total assets (3)	$	11,634	$	685	$	1,163		$	713		$	10,160		$	(10,088	)	$	14,267
Capital expenditures	$	684	$	9	$	2		$	12		$	24		$	-		$	731

2012

In millions	Distribution operations		Retail operations		Wholesale services (1)			Midstream operations		Other (2)			Intercompany eliminations			Consolidated
Operating revenues from external parties	$	2,691	$	733	$	88		$	78	$	7		$	(35	)	$	3,562
Intercompany revenues		167		2		-			-		-			(169	)		-
Total operating revenues		2,858		735		88			78		7			(204	)		3,562
Operating expenses
Cost of goods sold		1,221		488		38			32		-			(196	)		1,583
Operation and maintenance		642		114		48			19		1			(8	)		816
Depreciation and amortization		347		18		2			14		13			-			394
Nicor merger expenses (4)		-		-		-			-		20			-			20
Taxes other than income taxes		140		4		4			5		6			-			159
Total operating expenses		2,350		624		92			70		40			(204	)		2,972
Operating income (loss)		508		111		(4	)		8		(33	)		-			590
Other income		9		-		1			2		12			-			24
EBIT	$	517	$	111	$	(3	)	$	10	$	(21	)	$	-		$	614
Identifiable and total assets (3)	$	11,256	$	506	$	1,218		$	720	$	9,848		$	(9,769	)	$	13,779
Capital expenditures	$	649	$	8	$	3		$	62	$	53		$	-		$	775

(1) The revenues for wholesale services are netted with costs associated with its energy and risk management activities. A reconciliation of our operating revenues and our intercompany revenues for the years ended December 31, are shown in the following table. Wholesale services 2014 operating revenues are related to colder-than-normal weather and extreme volatility and are not indicative of future performance.

In millions	Third party gross revenues		Intercompany revenues		Total gross revenues		Less gross gas costs		Operating revenues
2014	$	10,709	$	718	$	11,427	$	10,849	$	578
2013		7,681		417		8,098		8,038		60
2012		6,089		350		6,439		6,351		88

(2) Our other non-reportable segments now also include our investment in Triton, which was part of our cargo shipping segment that is classified as discontinued operations. For more information, see Note 14.

(3) Identifiable assets are those used in each segment’s operations and exclude assets held for sale.

(4) Transaction expenses associated with the Nicor merger are shown separately to better compare year-over-year results.