Segment Information

We manage and review our consolidated operations through the following reportable segments:


•	The distribution segment is primarily comprised of our regulated natural gas distribution and related sales operations in eight states.


•	The pipeline and storage segment is comprised primarily of the pipeline and storage operations of our Atmos Pipeline-Texas division and our natural gas transmission operations in Louisiana.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies found in our Annual Report on Form 10-K for the fiscal year ended September 30, 2018.

Income statements and capital expenditures for the three and six months ended March 31, 2019 and 2018 by segment are presented in the following tables:



	Three Months Ended March 31, 2019
	Distribution		Pipeline and Storage			Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	1,057,192	$	37,453		$	—		$	1,094,645
Intersegment revenues	697		98,197			(98,894		)	—
Total operating revenues	1,057,889		135,650			(98,894		)	1,094,645
Purchased gas cost	570,348		(90		)	(98,582		)	471,676
Operation and maintenance expense	117,621		32,118			(312		)	149,427
Depreciation and amortization expense	69,904		26,868			—			96,772
Taxes, other than income	71,053		8,040			—			79,093
Operating income	228,963		68,714			—			297,677
Other non-operating income (expense)	5,263		(1,031		)	—			4,232
Interest charges	15,896		11,053			—			26,949
Income before income taxes	218,330		56,630			—			274,960
Income tax expense	46,137		13,935			—			60,072
Net income	$	172,193	$	42,695		$	—		$	214,888
Capital expenditures	$	293,270	$	67,912		$	—		$	361,182



	Three Months Ended March 31, 2018
	Distribution			Pipeline and Storage			Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	1,198,309		$	21,100		$	—		$	1,219,409
Intersegment revenues	982			99,855			(100,837		)	—
Total operating revenues	1,199,291			120,955			(100,837		)	1,219,409
Purchased gas cost	727,053			433			(100,526		)	626,960
Operation and maintenance expense	130,077			29,393			(311		)	159,159
Depreciation and amortization expense	65,649			23,732			—			89,381
Taxes, other than income	64,692			8,315			—			73,007
Operating income	211,820			59,082			—			270,902
Other non-operating expense	(1,521		)	(646		)	—			(2,167		)
Interest charges	16,898			10,406			—			27,304
Income before income taxes	193,401			48,030			—			241,431
Income tax expense	48,158			14,281			—			62,439
Net income	$	145,243		$	33,749		$	—		$	178,992
Capital expenditures	$	224,235		$	86,505		$	—		$	310,740



	Six Months Ended March 31, 2019
	Distribution			Pipeline and Storage			Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	1,895,373		$	77,054		$	—		$	1,972,427
Intersegment revenues	1,351			193,066			(194,417		)	—
Total operating revenues	1,896,724			270,120			(194,417		)	1,972,427
Purchased gas cost	1,008,080			(448		)	(193,791		)	813,841
Operation and maintenance expense	223,388			65,265			(626		)	288,027
Depreciation and amortization expense	139,613			53,224			—			192,837
Taxes, other than income	127,243			16,338			—			143,581
Operating income	398,400			135,741			—			534,141
Other non-operating expense	(1,214		)	(2,277		)	—			(3,491		)
Interest charges	34,106			20,692			—			54,798
Income before income taxes	363,080			112,772			—			475,852
Income tax expense	76,502			26,816			—			103,318
Net income	$	286,578		$	85,956		$	—		$	372,534
Capital expenditures	$	595,815		$	181,771		$	—		$	777,586



	Six Months Ended March 31, 2018
	Distribution			Pipeline and Storage			Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	2,058,762		$	49,839		$	—		$	2,108,601
Intersegment revenues	1,321			197,579			(198,900		)	—
Total operating revenues	2,060,083			247,418			(198,900		)	2,108,601
Purchased gas cost	1,190,811			1,345			(198,279		)	993,877
Operation and maintenance expense	233,292			55,533			(621		)	288,204
Depreciation and amortization expense	131,083			46,672			—			177,755
Taxes, other than income	119,799			15,981			—			135,780
Operating income	385,098			127,887			—			512,985
Other non-operating expense	(3,443		)	(1,281		)	—			(4,724		)
Interest charges	38,266			20,547			—			58,813
Income before income taxes	343,389			106,059			—			449,448
Income tax (benefit) expense	(50,953		)	7,277			—			(43,676		)
Net income	$	394,342		$	98,782		$	—		$	493,124
Capital expenditures	$	465,484		$	228,494		$	—		$	693,978

Balance sheet information at March 31, 2019 and September 30, 2018 by segment is presented in the following tables:



	March 31, 2019
	Distribution		Pipeline and Storage		Eliminations			Consolidated
	(In thousands)
Property, plant and equipment, net	$	8,126,906	$	2,844,828	$	—		$	10,971,734
Total assets	$	11,904,290	$	3,071,654	$	(2,300,994	)	$	12,674,950



	September 30, 2018
	Distribution		Pipeline and Storage		Eliminations			Consolidated
	(In thousands)
Property, plant and equipment, net	$	7,644,693	$	2,726,454	$	—		$	10,371,147
Total assets	$	11,109,128	$	2,963,480	$	(2,198,171	)	$	11,874,437