Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information [Text Block]

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 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 2015 Form 10-K for further discussion of our segments.

Inter-segment transactions were insignificant for the periods presented. The following table presents summary financial information concerning the reportable segments:

	Three Months Ended September 30,
In thousands	Utility			Gas Storage		Other			Total
2016
Operating revenues	$	80,378		$	7,293	$	56		$	87,727
Depreciation and amortization	19,173			1,455		—			20,628
Income (loss) from operations	(7,264		)	3,502		(675		)	(4,437		)
Net income (loss)	(9,511		)	1,813		(342		)	(8,040		)
Capital expenditures	36,238			437		—			36,675
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

	Nine Months Ended September 30,
In thousands	Utility		Gas Storage		Other			Total
2016
Operating revenues	$	422,617	$	19,654	$	168		$	442,439
Depreciation and amortization	56,894		4,541		—			61,435
Income (loss) from operations	74,745		8,107		(611		)	82,241
Net income (loss)	26,848		3,988		(216		)	30,620
Capital expenditures	96,710		1,401		—			98,111
Total assets at September 30, 2016	2,684,618		259,483		15,783			2,959,884
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	2,686,367		269,228		15,123			2,970,718
Total assets at December 31, 2015	2,792,736		261,750		14,924			3,069,410

Utility Margin

Utility margin is a financial measure consisting of utility operating revenues, which are reduced by revenue taxes, the associated cost of gas, and environmental recovery revenues. The cost of gas purchased for utility customers is generally a pass-through cost in the amount of revenues billed to regulated utility customers. Environmental recovery revenues represent collections received from customers through our environmental recovery mechanism in Oregon. These collections are offset by the amortization of environmental liabilities, which is presented as environmental remediation expense in our operating expenses. By subtracting cost of gas and environmental remediation expense 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 and other segments 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	2016		2015		2016		2015
Utility margin calculation:
Utility operating revenues(1)	$	80,378	$	87,475	$	422,617	$	476,672
Less: Utility cost of gas	28,264		35,856		157,546		223,737
Environmental remediation expense	1,191		—		8,113		—
Utility margin	$	50,923	$	51,619	$	256,958	$	252,935

⁽¹⁾   Utility operating revenues include environmental recovery revenues, which are collections received from customers through our environmental recovery mechanism in Oregon, offset by environmental remediation expense. Collections under this mechanism began in November 2015.