17. Segment Information

12 Months Ended

Sep. 30, 2011

Segment Reporting Disclosure Abstract

Atmos Energy Corporation and its subsidiaries are engaged primarily in the regulated natural gas distribution, transmission and storage business as well as other nonregulated businesses. We distribute natural gas through sales and transportation arrangements to over three million residential, commercial, public authority and industrial customers through our six regulated natural gas distribution divisions, which cover service areas located in 12 states. In addition, we transport natural gas for others through our distribution system.

Through our nonregulated businesses, we primarily provide natural gas management and marketing services to municipalities, other local distribution companies and industrial customers primarily in the Midwest and Southeast. Additionally, we provide natural gas transportation and storage services to certain of our natural gas distribution operations and to third parties.

Through November 30, 2010, our operations were divided into four segments:

The natural gas distribution segment, which included our regulated natural gas distribution and related sales operations.
The regulated transmission and storage segment, which included the regulated pipeline and storage operations of our Atmos Pipeline – Texas Division.
The natural gas marketing segment, which included a variety of nonregulated natural gas management services.
The pipeline, storage and other segment, which included our nonregulated natural gas gathering transmission and storage services.

As a result of the appointment of a new CEO effective October 1, 2010, during the first quarter of fiscal 2011, we revised the information used by the chief operating decision maker to manage the Company. As a result of this change, effective December 1, 2010, we began dividing our operations into the following three segments:

The natural gas distribution segment, remains unchanged and includes our regulated natural gas distribution and related sales operations.
The regulated transmission and storage segment, remains unchanged and includes the regulated pipeline and storage operations of our Atmos Pipeline – Texas Division.
The nonregulated segment, is comprised of our nonregulated natural gas management, nonregulated natural gas transmission, storage and other services which were previously reported in the natural gas marketing and pipeline, storage and other segments.

Our determination of reportable segments considers the strategic operating units under which we manage sales of various products and services to customers in differing regulatory environments. Although our natural gas distribution segment operations are geographically dispersed, they are reported as a single segment as each natural gas distribution division has similar economic characteristics. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. We evaluate performance based on net income or loss of the respective operating units. Interest expense is allocated pro rata to each segment based upon our net investment in each segment. Income taxes are allocated to each segment as if each segment's taxes were calculated on a separate return basis.

Summarized income statements and capital expenditures by segment are shown in the following tables. Prior-year amounts have been restated to reflect the new operating segments.

		Year Ended September 30, 2011
		Natural Gas Distribution		Regulated Transmission and Storage		Nonregulated		Eliminations		Consolidated


		(In thousands)
Operating revenues from
	external parties	$	2,530,980	$	87,141	$	1,729,513	$	-	$	4,347,634
Intersegment revenues			883		132,232		295,380		(428,495)		-
			2,531,863		219,373		2,024,893		(428,495)		4,347,634
Purchased gas cost			1,487,499		-		1,959,893		(426,999)		3,020,393
	Gross profit		1,044,364		219,373		65,000		(1,496)		1,327,241
Operating expenses
	Operation and maintenance		348,083		70,401		32,308		(1,502)		449,290
	Depreciation and amortization		196,909		25,997		4,193		-		227,099
	Taxes, other than income		161,371		14,700		2,612		-		178,683
	Asset impairments		-		-		30,270		-		30,270
Total operating expenses			706,363		111,098		69,383		(1,502)		885,342
Operating income (loss)			338,001		108,275		(4,383)		6		441,899
Miscellaneous income			16,557		4,715		657		(430)		21,499
Interest charges			115,802		31,432		4,015		(424)		150,825
Income (loss) from continuing
	operations before income taxes		238,756		81,558		(7,741)		-		312,573
Income tax expense (benefit)			84,755		29,143		(209)		-		113,689
Income (loss) from continuing
	operations		154,001		52,415		(7,532)		-		198,884
Income from discontinued
	operations, net of tax		8,717		-		-		-		8,717
	Net income (loss)	$	162,718	$	52,415	$	(7,532)	$	-	$	207,601
Capital expenditures		$	496,899	$	118,452	$	7,614	$	-	$	622,965

		Year Ended September 30, 2010
		Natural Gas Distribution		Regulated Transmission and Storage		Nonregulated		Eliminations		Consolidated


		(In thousands)
Operating revenues from
	external parties	$	2,841,768	$	97,023	$	1,781,044	$	-	$	4,719,835
Intersegment revenues			870		105,990		365,614		(472,474)		-
			2,842,638		203,013		2,146,658		(472,474)		4,719,835
Purchased gas cost			1,820,627		-		2,032,567		(470,864)		3,382,330
	Gross profit		1,022,011		203,013		114,091		(1,610)		1,337,505
Operating expenses
	Operation and maintenance		355,357		72,249		34,517		(1,610)		460,513
	Depreciation and amortization		185,147		21,368		5,074		-		211,589
	Taxes, other than income		171,338		12,358		4,556		-		188,252
Total operating expenses			711,842		105,975		44,147		(1,610)		860,354
Operating income			310,169		97,038		69,944		-		477,151
Miscellaneous income (expense)			1,567		135		3,859		(5,717)		(156)
Interest charges			118,319		31,174		10,584		(5,717)		154,360
Income from continuing operations
	before income taxes		193,417		65,999		63,219		-		322,635
Income tax expense			75,034		24,513		24,815		-		124,362
Income from continuing
	operations		118,383		41,486		38,404		-		198,273
Income from discontinued
	operations, net of tax		7,566		-		-		-		7,566
	Net income	$	125,949	$	41,486	$	38,404	$	-	$	205,839
Capital expenditures		$	437,815	$	95,835	$	8,986	$	-	$	542,636

		Year Ended September 30, 2009
		Natural Gas Distribution		Regulated Transmission and Storage		Nonregulated		Eliminations		Consolidated



		(In thousands)
Operating revenues from
	external parties	$	2,883,997	$	119,427	$	1,865,687	$	-	$	4,869,111
Intersegment revenues			799		90,231		418,301		(509,331)		-
			2,884,796		209,658		2,283,988		(509,331)		4,869,111
Purchased gas cost			1,887,192		-		2,169,880		(507,639)		3,549,433
	Gross profit		997,604		209,658		114,108		(1,692)		1,319,678
Operating expenses
	Operation and maintenance		361,123		85,249		41,368		(2,036)		485,704
	Depreciation and amortization		187,050		20,413		4,521		-		211,984
	Taxes, other than income		166,854		10,231		3,157		-		180,242
	Asset impairments		4,599		602		181		-		5,382
Total operating expenses			719,626		116,495		49,227		(2,036)		883,312
Operating income			277,978		93,163		64,881		344		436,366
Miscellaneous income (expense)			6,002		1,433		6,399		(16,901)		(3,067)
Interest charges			123,863		30,982		14,350		(16,557)		152,638
Income from continuing operations
	before income taxes		160,117		63,614		56,930		-		280,661
Income tax expense			50,989		22,558		23,815		-		97,362
Income from continuing
	operations		109,128		41,056		33,115		-		183,299
Income from discontinued
	operations, net of tax		7,679		-		-		-		7,679
	Net income	$	116,807	$	41,056	$	33,115	$	-	$	190,978
Capital expenditures		$	379,500	$	108,332	$	21,662	$	-	$	509,494

The following table summarizes our revenues by products and services for the fiscal year ended September 30. Prior-year amounts have been restated to reflect the new operating segments.

					2011		2010		2009
				(In thousands)
Natural gas distribution revenues:
	Gas sales revenues:
		Residential		$	1,570,723	$	1,784,051	$	1,768,082
		Commercial			698,366		787,433		807,109
		Industrial			106,569		110,280		132,487
		Public authority and other			69,176		70,402		88,972
			Total gas sales revenues		2,444,834		2,752,166		2,796,650
	Transportation revenues				59,547		58,511		56,162
	Other gas revenues				26,599		31,091		31,185
		Total natural gas distribution revenues			2,530,980		2,841,768		2,883,997
Regulated transmission and storage revenues					87,141		97,023		119,427
Nonregulated revenues					1,729,513		1,781,044		1,865,687
		Total operating revenues		$	4,347,634	$	4,719,835	$	4,869,111

Balance sheet information at September 30, 2011 and 2010 by segment is presented in the following tables. Prior-year amounts have been restated to reflect the new operating segments.

			September 30, 2011
			Natural		Regulated
			Gas		Transmission
			Distribution		and Storage		Nonregulated		Eliminations		Consolidated
			(In thousands)
ASSETS
Property, plant and
	equipment, net		$	4,248,198	$	838,302	$	61,418	$	-	$	5,147,918
Investment in subsidiaries				670,993		-		(2,096)		(668,897)		-
Current assets
	Cash and cash equivalents			24,646		-		106,773		-		131,419
	Assets from risk
		management activities		843		-		17,501		-		18,344
	Other current assets			655,716		15,413		386,215		(196,154)		861,190
	Intercompany receivables			569,898		-		-		(569,898)		-
		Total current assets		1,251,103		15,413		510,489		(766,052)		1,010,953
Intangible assets				-		-		207		-		207
Goodwill				572,908		132,381		34,711		-		740,000
Noncurrent assets from risk
	management activities			998		-		-		-		998
Deferred charges and other
	assets			353,960		18,028		10,807		-		382,795
			$	7,098,160	$	1,004,124	$	615,536	$	(1,434,949)	$	7,282,871

CAPITALIZATION AND LIABILITIES
Shareholders' equity			$	2,255,421	$	265,102	$	405,891	$	(670,993)	$	2,255,421
Long-term debt				2,205,986		-		131		-		2,206,117
		Total capitalization		4,461,407		265,102		406,022		(670,993)		4,461,538
Current liabilities
	Current maturities of
		long-term debt		2,303		-		131		-		2,434
	Short-term debt			387,691		-		-		(181,295)		206,396
	Liabilities from risk
		management activities		11,916		-		3,537		-		15,453
	Other current liabilities			474,783		10,369		170,926		(12,763)		643,315
	Intercompany payables			-		543,084		26,814		(569,898)		-
		Total current liabilities		876,693		553,453		201,408		(763,956)		867,598
Deferred income taxes				789,649		173,351		(2,907)		-		960,093
Noncurrent liabilities from risk
	management activities			67,862		-		10,227		-		78,089
Regulatory cost of removal
	obligation			428,947		-		-		-		428,947
Deferred credits and other
	liabilities			473,602		12,218		786		-		486,606
			$	7,098,160	$	1,004,124	$	615,536	$	(1,434,949)	$	7,282,871

			September 30, 2010
			Natural		Regulated
			Gas		Transmission
			Distribution		and Storage		Nonregulated		Eliminations		Consolidated
			(In thousands)
ASSETS
Property, plant and
	equipment, net		$	3,959,112	$	748,947	$	85,016	$	-	$	4,793,075
Investment in subsidiaries				620,863		-		(2,096)		(618,767)		-
Current assets
	Cash and cash equivalents			31,952		-		100,000		-		131,952
	Assets from risk
		management activities		2,219		-		18,356		-		20,575
	Other current assets			528,655		19,504		325,348		(150,842)		722,665
	Intercompany receivables			546,313		-		-		(546,313)		-
		Total current assets		1,109,139		19,504		443,704		(697,155)		875,192
Intangible assets				-		-		834		-		834
Goodwill				572,262		132,341		34,711		-		739,314
Noncurrent assets from risk
	management activities			47		-		890		-		937
Deferred charges and other
	assets			324,707		13,037		16,695		-		354,439
			$	6,586,130	$	913,829	$	579,754	$	(1,315,922)	$	6,763,791

CAPITALIZATION AND LIABILITIES
Shareholders' equity			$	2,178,348	$	212,687	$	408,176	$	(620,863)	$	2,178,348
Long-term debt				1,809,289		-		262		-		1,809,551
		Total capitalization		3,987,637		212,687		408,438		(620,863)		3,987,899
Current liabilities
	Current maturities of
		long-term debt		360,000		-		131		-		360,131
	Short-term debt			258,488		-		-		(132,388)		126,100
	Liabilities from risk
		management activities		48,942		-		731		-		49,673
	Other current liabilities			473,076		10,949		162,508		(16,358)		630,175
	Intercompany payables			-		543,007		3,306		(546,313)		-
		Total current liabilities		1,140,506		553,956		166,676		(695,059)		1,166,079
Deferred income taxes				691,126		142,337		(4,335)		-		829,128
Noncurrent liabilities from risk
	management activities			2,924		-		6,000		-		8,924
Regulatory cost of removal
	obligation			350,521		-		-		-		350,521
Deferred credits and other
	liabilities			413,416		4,849		2,975		-		421,240
			$	6,586,130	$	913,829	$	579,754	$	(1,315,922)	$	6,763,791