11. Segment Information

6 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

11. Segment Information

11. Segment Information

As discussed in Note 1 above, we operate the Company through the following three segments:

• The natural gas distributionsegment, which includes our regulated natural gas distribution and related sales operations,
• The regulated transmission and storage segment, which includes the regulated pipeline and storage operations of our Atmos Pipeline—Texas Division and
• The nonregulated segment, which is comprised of our nonregulated natural gas management, nonregulated natural gas transmission, storage and other services.

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 found in our Annual Report on Form 10-K for the fiscal year ended September 30, 2011. We evaluate performance based on net income or loss of the respective operating units.

Income statements for the three and six month periods ended March 31, 2012 and 2011 by segment are presented in the following tables:

			Three Months Ended March 31, 2012
			Natural		Regulated
			Gas		Transmission
			Distribution		and Storage		Nonregulated		Eliminations		Consolidated
			(In thousands)
Operating revenues from
	external parties		$	888,685	$	20,430	$	334,335	$	-	$	1,243,450
Intersegment revenues				323		37,607		36,428		(74,358)		-
				889,008		58,037		370,763		(74,358)		1,243,450
Purchased gas cost				508,206		-		374,992		(74,009)		809,189
	Gross profit			380,802		58,037		(4,229)		(349)		434,261
Operating expenses
	Operation and maintenance			89,443		15,847		5,769		(351)		110,708
	Depreciation and amortization			51,755		7,792		725		-		60,272
	Taxes, other than income			50,313		3,915		691		-		54,919
Total operating expenses				191,511		27,554		7,185		(351)		225,899
Operating income (loss)				189,291		30,483		(11,414)		2		208,362
Miscellaneous income (expense)				733		(56)		567		(628)		616
Interest charges				28,833		7,614		839		(626)		36,660
Income (loss) from continuing
	operations before income taxes			161,191		22,813		(11,686)		-		172,318
Income tax expense (benefit)				62,890		8,193		(4,675)		-		66,408
Income (loss) from continuing
	operations			98,301		14,620		(7,011)		-		105,910
Income from discontinued
	operations, net of tax			3,201		-		-		-		3,201
		Net income (loss)	$	101,502	$	14,620	$	(7,011)	$	-	$	109,111
Capital expenditures			$	114,402	$	38,871	$	3,456	$	-	$	156,729

			Three Months Ended March 31, 2011
			Natural		Regulated
			Gas		Transmission
			Distribution		and Storage		Nonregulated		Eliminations		Consolidated
			(In thousands)
Operating revenues from
	external parties		$	1,077,178	$	21,597	$	482,722	$	-	$	1,581,497
Intersegment revenues				236		33,379		100,809		(134,424)		-
				1,077,414		54,976		583,531		(134,424)		1,581,497
Purchased gas cost				698,410		-		563,473		(134,054)		1,127,829
	Gross profit			379,004		54,976		20,058		(370)		453,668
Operating expenses
	Operation and maintenance			92,266		15,231		7,035		(370)		114,162
	Depreciation and amortization			48,555		5,798		1,114		-		55,467
	Taxes, other than income			50,088		4,113		(643)		-		53,558
	Asset impairment			-		-		19,282		-		19,282
Total operating expenses				190,909		25,142		26,788		(370)		242,469
Operating income (loss)				188,095		29,834		(6,730)		-		211,199
Miscellaneous income				20,156		5,861		306		(121)		26,202
Interest charges				29,605		8,085		306		(121)		37,875
Income (loss) from continuing
	operations before income taxes			178,646		27,610		(6,730)		-		199,526
Income tax expense (benefit)				64,085		9,871		(2,590)		-		71,366
Income (loss) from continuing
	operations			114,561		17,739		(4,140)		-		128,160
Income from discontinued
	operations, net of tax			4,049		-		-		-		4,049
		Net income (loss)	$	118,610	$	17,739	$	(4,140)	$	-	$	132,209
Capital expenditures			$	109,762	$	11,818	$	1,921	$	-	$	123,501

			Six Months Ended March 31, 2012
			Natural		Regulated
			Gas		Transmission
			Distribution		and Storage		Nonregulated		Eliminations		Consolidated
			(In thousands)
Operating revenues from
	external parties		$	1,581,753	$	39,870	$	723,000	$	-	$	2,344,623
Intersegment revenues				547		74,926		91,939		(167,412)		-
				1,582,300		114,796		814,939		(167,412)		2,344,623
Purchased gas cost				910,413		-		803,763		(166,696)		1,547,480
	Gross profit			671,887		114,796		11,176		(716)		797,143
Operating expenses
	Operation and maintenance			182,857		32,812		11,820		(719)		226,770
	Depreciation and amortization			102,586		15,443		1,458		-		119,487
	Taxes, other than income			88,792		7,699		1,626		-		98,117
Total operating expenses				374,235		55,954		14,904		(719)		444,374
Operating income (loss)				297,652		58,842		(3,728)		3		352,769
Miscellaneous income (expense)				(1,023)		(336)		603		(503)		(1,259)
Interest charges				56,688		14,823		1,091		(500)		72,102
Income (loss) from continuing
	operations before income taxes			239,941		43,683		(4,216)		-		279,408
Income tax expense (benefit)				93,735		15,649		(1,674)		-		107,710
Income (loss) from continuing
	operations			146,206		28,034		(2,542)		-		171,698
Income from discontinued
	operations, net of tax			5,920		-		-		-		5,920
		Net income (loss)	$	152,126	$	28,034	$	(2,542)	$	-	$	177,618
Capital expenditures			$	243,135	$	62,991	$	4,997	$	-	$	311,123

			Six Months Ended March 31, 2011
			Natural		Regulated
			Gas		Transmission
			Distribution		and Storage		Nonregulated		Eliminations		Consolidated
			(In thousands)
Operating revenues from
	external parties		$	1,780,439	$	42,830	$	891,490	$	-	$	2,714,759
Intersegment revenues				437		61,153		167,681		(229,271)		-
				1,780,876		103,983		1,059,171		(229,271)		2,714,759
Purchased gas cost				1,110,936		-		1,013,935		(228,504)		1,896,367
	Gross profit			669,940		103,983		45,236		(767)		818,392
Operating expenses
	Operation and maintenance			181,495		30,805		17,119		(767)		228,652
	Depreciation and amortization			96,449		11,597		2,198		-		110,244
	Taxes, other than income			84,536		7,666		1,524		-		93,726
	Asset impairment			-		-		19,282		-		19,282
Total operating expenses				362,480		50,068		40,123		(767)		451,904
Operating income				307,460		53,915		5,113		-		366,488
Miscellaneous income				19,458		5,579		596		(157)		25,476
Interest charges				59,302		16,149		1,476		(157)		76,770
Income from continuing
	operations before income taxes			267,616		43,345		4,233		-		315,194
Income tax expense				98,634		15,504		1,796		-		115,934
Income from continuing
	operations			168,982		27,841		2,437		-		199,260
Income from discontinued
	operations, net of tax			6,946		-		-		-		6,946
		Net income	$	175,928	$	27,841	$	2,437	$	-	$	206,206
Capital expenditures			$	219,261	$	24,557	$	2,845	$	-	$	246,663

Balance sheet information at March 31, 2012 and September 30, 2011 by segment is presented to reflect our business structure as of March 31, 2012in the following tables.

			March 31, 2012
			Natural		Regulated
			Gas		Transmission
			Distribution		and Storage		Nonregulated		Eliminations		Consolidated
			(In thousands)
ASSETS
Property, plant and
	equipment, net		$	4,382,291	$	886,507	$	65,214	$	-	$	5,334,012
Investment in subsidiaries				674,594		-		(2,096)		(672,498)		-
Current assets
	Cash and cash equivalents			40,140		-		6,900		-		47,040
	Assets from risk
		management activities		502		-		2,877		-		3,379
	Other current assets			632,486		13,278		399,389		(201,731)		843,422
	Intercompany receivables			584,018		-		-		(584,018)		-
		Total current assets		1,257,146		13,278		409,166		(785,749)		893,841
Intangible assets				-		-		185		-		185
Goodwill				572,908		132,381		34,711		-		740,000
Noncurrent assets from risk
	management activities			-		-		10,841		-		10,841
Deferred charges and other
	assets			366,329		13,203		10,316		-		389,848
			$	7,253,268	$	1,045,369	$	528,337	$	(1,458,247)	$	7,368,727
CAPITALIZATION AND
	LIABILITIES
Shareholders' equity			$	2,360,712	$	293,135	$	381,459	$	(674,594)	$	2,360,712
Long-term debt				1,956,147		-		66		-		1,956,213
		Total capitalization		4,316,859		293,135		381,525		(674,594)		4,316,925
Current liabilities
	Current maturities of
		long-term debt		250,000		-		131		-		250,131
	Short-term debt			371,996		-		-		(198,000)		173,996
	Liabilities from risk
		management activities		47,281		-		5,296		-		52,577
	Other current liabilities			507,354		6,309		119,382		(1,635)		631,410
	Intercompany payables			-		551,330		32,688		(584,018)		-
		Total current liabilities		1,176,631		557,639		157,497		(783,653)		1,108,114
Deferred income taxes				890,455		188,936		(16,903)		-		1,062,488
Noncurrent liabilities from
	risk management activities			1		-		5,300		-		5,301
Regulatory cost of removal
	obligation			414,001		-		-		-		414,001
Deferred credits and other
	liabilities			455,321		5,659		918		-		461,898
			$	7,253,268	$	1,045,369	$	528,337	$	(1,458,247)	$	7,368,727

			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