Segment Information

9 Months Ended

Jun. 30, 2019

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 nine months ended June 30, 2019 and 2018 by segment are presented in the following tables:



	Three Months Ended June 30, 2019
	Distribution		Pipeline and Storage			Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	444,287	$	41,451		$	—		$	485,738
Intersegment revenues	657		107,747			(108,404		)	—
Total operating revenues	444,944		149,198			(108,404		)	485,738
Purchased gas cost	139,518		(96		)	(108,096		)	31,326
Operation and maintenance expense	123,998		40,855			(308		)	164,545
Depreciation and amortization expense	70,611		27,089			—			97,700
Taxes, other than income	62,134		7,831			—			69,965
Operating income	48,683		73,519			—			122,202
Other non-operating income (expense)	3,005		(1,360		)	—			1,645
Interest charges	10,597		8,995			—			19,592
Income before income taxes	41,091		63,164			—			104,255
Income tax expense	8,693		15,096			—			23,789
Net income	$	32,398	$	48,068		$	—		$	80,466
Capital expenditures	$	316,825	$	104,788		$	—		$	421,613



	Three Months Ended June 30, 2018
	Distribution			Pipeline and Storage			Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	534,816		$	27,429		$	—		$	562,245
Intersegment revenues	672			100,204			(100,876		)	—
Total operating revenues	535,488			127,633			(100,876		)	562,245
Purchased gas cost	230,887			561			(100,562		)	130,886
Operation and maintenance expense	110,568			33,494			(314		)	143,748
Depreciation and amortization expense	66,504			24,167			—			90,671
Taxes, other than income	64,420			8,200			—			72,620
Operating income	63,109			61,211			—			124,320
Other non-operating expense	(2,518		)	(812		)	—			(3,330		)
Interest charges	13,315			10,034			—			23,349
Income before income taxes	47,276			50,365			—			97,641
Income tax expense	11,932			14,516			—			26,448
Net income	$	35,344		$	35,849		$	—		$	71,193
Capital expenditures	$	284,209		$	110,285		$	—		$	394,494



	Nine Months Ended June 30, 2019
	Distribution		Pipeline and Storage			Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	2,339,660	$	118,505		$	—		$	2,458,165
Intersegment revenues	2,008		300,813			(302,821		)	—
Total operating revenues	2,341,668		419,318			(302,821		)	2,458,165
Purchased gas cost	1,147,598		(544		)	(301,887		)	845,167
Operation and maintenance expense	347,386		106,120			(934		)	452,572
Depreciation and amortization expense	210,224		80,313			—			290,537
Taxes, other than income	189,377		24,169			—			213,546
Operating income	447,083		209,260			—			656,343
Other non-operating income (expense)	1,791		(3,637		)	—			(1,846		)
Interest charges	44,703		29,687			—			74,390
Income before income taxes	404,171		175,936			—			580,107
Income tax expense	85,195		41,912			—			127,107
Net income	$	318,976	$	134,024		$	—		$	453,000
Capital expenditures	$	912,640	$	286,559		$	—		$	1,199,199



	Nine Months Ended June 30, 2018
	Distribution			Pipeline and Storage			Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	2,593,578		$	77,268		$	—		$	2,670,846
Intersegment revenues	1,993			297,783			(299,776		)	—
Total operating revenues	2,595,571			375,051			(299,776		)	2,670,846
Purchased gas cost	1,421,698			1,906			(298,841		)	1,124,763
Operation and maintenance expense	343,860			89,027			(935		)	431,952
Depreciation and amortization expense	197,587			70,839			—			268,426
Taxes, other than income	184,219			24,181			—			208,400
Operating income	448,207			189,098			—			637,305
Other non-operating expense	(5,961		)	(2,093		)	—			(8,054		)
Interest charges	51,581			30,581			—			82,162
Income before income taxes	390,665			156,424			—			547,089
Income tax (benefit) expense	(39,021		)	21,793			—			(17,228		)
Net income	$	429,686		$	134,631		$	—		$	564,317
Capital expenditures	$	749,693		$	338,779		$	—		$	1,088,472

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



	June 30, 2019
	Distribution		Pipeline and Storage		Eliminations			Consolidated
	(In thousands)
Property, plant and equipment, net	$	8,404,238	$	2,936,358	$	—		$	11,340,596
Total assets	$	12,083,315	$	3,174,516	$	(2,376,733	)	$	12,881,098



	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