Segment Information

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Information

4. SEGMENT INFORMATION

We primarily operate in two reportable business segments: local gas distribution and gas storage. We also have other investments and business activities not specifically related to one of these two reporting segments, which are aggregated and reported as other. We refer to our local gas distribution business as the utility, and our gas storage segment and other as non-utility. Our utility segment also includes the utility portion of our Mist underground storage facility in Oregon (Mist) and NWN Gas Reserves, which is a wholly-owned subsidiary of Energy Corp. Our gas storage segment includes NWN Gas Storage, which is a wholly-owned subsidiary of NWN Energy, Gill Ranch, which is a wholly-owned subsidiary of NWN Gas Storage, the non-utility portion of Mist, and all third-party asset management services. Other includes NNG Financial and NWN Energy's equity investment in TWH, which is pursuing development of a cross-Cascades transmission pipeline project. See Note 4 in the 2014 Form 10-K for further discussion of our segments.

Inter-segment transactions are insignificant. The following table presents summary financial information concerning the reportable segments:

	Three Months Ended September 30,
In thousands	Utility			Gas Storage		Other		Total
2015
Operating revenues	$	87,475		$	5,596	$	57	$	93,128
Depreciation and amortization	18,721			1,621		—		20,342
Income (loss) from operations	(4,088		)	2,204		11		(1,873		)
Net income (loss)	(7,529		)	799		45		(6,685		)
Capital expenditures	28,325			526		—		28,851
2014
Operating revenues	$	82,361		$	4,782	$	56	$	87,199
Depreciation and amortization	18,279			1,659		—		19,938
Income (loss) from operations	(6,221		)	926		218		(5,077		)
Net income (loss)	(8,808		)	2		73		(8,733		)
Capital expenditures	33,717			346		—		34,063

	Nine Months Ended September 30,
In thousands	Utility		Gas Storage		Other		Total
2015
Operating revenues	$	476,672	$	16,232	$	169	$	493,073
Depreciation and amortization	55,798		4,885		—		60,683
Income from operations	59,955		3,998		89		64,042
Net income	23,051		827		120		23,998
Capital expenditures	84,598		2,325		—		86,923
Total assets at September 30, 2015	2,693,953		269,289		15,123		2,978,365
2014
Operating revenues	$	495,931	$	17,655	$	168	$	513,754
Depreciation and amortization	54,333		4,903		—		59,236
Income from operations	78,971		3,994		252		83,217
Net income	29,416		472		334		30,222
Capital expenditures	85,793		759		—		86,552
Total assets at September 30, 2014	2,539,834		277,689		16,001		2,833,524
Total assets at December 31, 2014	$	2,775,011	$	273,813	$	16,121	$	3,064,945

Utility Margin

Utility margin is a financial measure consisting of utility operating revenues, which are reduced by revenue taxes and the associated cost of gas. The cost of gas purchased for utility customers is generally a pass-through cost in the amount of revenues billed to regulated utility customers. By subtracting cost of gas from utility operating revenues, utility margin provides a key metric used by our chief operating decision maker in assessing the performance of the utility segment. The gas storage segment and other emphasize growth in operating revenues as opposed to margin because they do not incur a product cost (i.e. cost of gas sold) like the utility and, therefore, use operating revenues and net income to assess performance.

The following table presents additional segment information concerning utility margin:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2015		2014		2015		2014
Utility margin calculation:
Utility operating revenues	$	87,475	$	82,361	$	476,672	$	495,931
Less: Utility cost of gas	35,856		32,227		223,737		245,708
Utility margin	$	51,619	$	50,134	$	252,935	$	250,223