Segment Information

6 Months Ended

Mar. 31, 2020

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, 2019.

Income statements and capital expenditures for the three and six months ended March 31, 2020 and 2019 by segment are presented in the following tables:



	Three Months Ended March 31, 2020
	Distribution			Pipeline and Storage		Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	932,296		$	45,369	$	—		$	977,665
Intersegment revenues	709			100,868		(101,577		)	—
Total operating revenues	933,005			146,237		(101,577		)	977,665
Purchased gas cost	418,935			202		(101,254		)	317,883
Operation and maintenance expense	115,851			32,296		(323		)	147,824
Depreciation and amortization expense	76,265			29,651		—			105,916
Taxes, other than income	68,413			6,191		—			74,604
Operating income	253,541			77,897		—			331,438
Other non-operating income (expense)	(5,191		)	2,202		—			(2,989		)
Interest charges	10,797			11,374		—			22,171
Income before income taxes	237,553			68,725		—			306,278
Income tax expense	50,489			16,143		—			66,632
Net income	$	187,064		$	52,582	$	—		$	239,646
Capital expenditures	$	373,313		$	92,238	$	—		$	465,551



	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



	Six Months Ended March 31, 2020
	Distribution			Pipeline and Storage		Eliminations			Consolidated
	(In thousands)
Operating revenues from external parties	$	1,760,136		$	93,092	$	—		$	1,853,228
Intersegment revenues	1,373			201,321		(202,694		)	—
Total operating revenues	1,761,509			294,413		(202,694		)	1,853,228
Purchased gas cost	816,493			301		(202,043		)	614,751
Operation and maintenance expense	230,203			70,517		(651		)	300,069
Depreciation and amortization expense	152,339			58,639		—			210,978
Taxes, other than income	128,656			14,555		—			143,211
Operating income	433,818			150,401		—			584,219
Other non-operating income (expense)	(3,237		)	5,135		—			1,898
Interest charges	27,159			22,241		—			49,400
Income before income taxes	403,422			133,295		—			536,717
Income tax expense	86,601			31,797		—			118,398
Net income	$	316,821		$	101,498	$	—		$	418,319
Capital expenditures	$	777,560		$	217,177	$	—		$	994,737



	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

Balance sheet information at March 31, 2020 and September 30, 2019 by segment is presented in the following tables:



	March 31, 2020
	Distribution		Pipeline and Storage		Eliminations			Consolidated
	(In thousands)
Property, plant and equipment, net	$	9,364,424	$	3,183,816	$	—		$	12,548,240
Total assets	$	13,946,651	$	3,403,106	$	(2,633,359	)	$	14,716,398



	September 30, 2019
	Distribution		Pipeline and Storage		Eliminations			Consolidated
	(In thousands)
Property, plant and equipment, net	$	8,737,590	$	3,050,079	$	—		$	11,787,669
Total assets	$	12,579,741	$	3,279,323	$	(2,491,445	)	$	13,367,619