Segment Information

9 Months Ended

Sep. 30, 2020

Segment Information [Abstract]

Segment Information

Note 14 – Segment Information 

On March 16, 2020, the Company completed the Peoples Gas Acquisition, marking the Company’s entrance into the regulated natural gas business. The operating results of Peoples are included in the consolidated financial statements for the period since the acquisition date. As a result, the Company now has twelve operating segments and two reportable segments. The Regulated Water segment is comprised of eight operating segments representing its water and wastewater regulated utility companies, which are organized by the states where the Company provides water and wastewater services. The eight water and wastewater utility operating segments are aggregated into one reportable segment, because each of these operating segments has the following similarities: economic characteristics, nature of services, production processes, customers, water distribution or wastewater collection methods, and the nature of the regulatory environment. The Regulated Natural Gas segment is comprised of one operating segment representing natural gas utility companies, acquired in the Peoples Gas Acquisition, for which the Company provides natural gas distribution services.

In addition to the Company’s two reportable segments, we include three of our operating segments within the Other category below. These segments are not quantitatively significant and are comprised of our non-regulated natural gas operations, Aqua Infrastructure, and Aqua Resources. Our non-regulated natural gas operations consist of utility service line protection solutions and repair services to households and the operation of gas marketing and production entities. Aqua Infrastructure provides non-utility raw water supply services for firms in the natural gas drilling industry. Aqua Resources manages a water system operating and maintenance contract and offers, through a third party, water and sewer service line protection solutions and repair services to households. In addition to these segments, Other is comprised of business activities not included in the reportable segments, including corporate costs that have not been allocated to the Regulated Water and Regulated Natural Gas segments and intersegment eliminations. Corporate costs include general and administrative expenses, and interest expense. The Company reports these corporate costs within Other as they relate to corporate-focused responsibilities and decisions and are not included in internal measures of segment operating performance used by the Company to measure the underlying performance of the operating segments.

The following table presents information about the Company’s reportable segments, including the operating results and capital expenditures of the Regulated Natural Gas segment for the period since the completion of the Peoples Gas Acquisition on March 16, 2020:

	Three Months Ended								Three Months Ended
	September 30, 2020								September 30, 2019
	Regulated Water		Regulated Natural Gas		Other		Consolidated		Regulated Water		Other		Consolidated
Operating revenues	$	255,725	$	88,880	$	4,042	$	348,647	$	242,856	$	770	$	243,626
Operations and maintenance expense		79,313		59,560		(2,699)		136,174		81,078		944		82,022
Purchased gas		-		14,841		1,903		16,744		-		-		-
Depreciation and amortization		42,955		25,793		1,193		69,941		39,781		152		39,933
Operating income (loss)		117,551		(15,459)		3,141		105,233		106,833		(363)		106,470
Interest expense, net		27,063		9,333		13,351		49,747		24,408		(1,445)		22,963
Allowance for funds used during construction		3,082		461		-		3,543		4,613		-		4,613
Change in fair value of interest rate swap agreements		-		-		-		-		-		-		-
Equity earnings (loss) in joint venture		-		-		(3,626)		(3,626)		-		135		135
Provision for income taxes (benefit)		8,081		(1,219)		(2,831)		4,031		(2,561)		1,008		(1,553)
Net income (loss)		85,379		(22,351)		(7,296)		55,732		88,888		(399)		88,489
	Nine Months Ended								Nine Months Ended
	September 30, 2020								September 30, 2019
	Regulated Water		Regulated Natural Gas		Other		Consolidated		Regulated Water		Other		Consolidated
Operating revenues	$	706,008	$	273,798	$	8,894	$	988,700	$	661,082	$	2,568	$	663,650
Operations and maintenance expense		229,652		120,192		21,571		371,415		229,498		18,283		247,781
Purchased gas		-		68,807		4,127		72,934		-		-		-
Depreciation and amortization		127,214		56,026		2,838		186,078		115,454		519		115,973
Operating income (loss)		303,850		19,974		(21,975)		301,849		272,596		(17,738)		254,858
Interest expense, net		78,500		21,260		31,544		131,304		72,133		1,989		74,122
Allowance for funds used during construction		7,905		816		-		8,721		12,280		-		12,280
Change in fair value of interest rate swap agreements		-		-		-		-		-		23,742		23,742
Equity earnings (loss) in joint venture		-		-		(3,283)		(3,283)		-		1,918		1,918
Provision for income taxes (benefit)		18,402		(8,131)		(12,902)		(2,631)		291		(12,185)		(11,894)
Net income (loss)		214,376		9,177		(41,411)		182,142		210,285		(49,969)		160,316
Capital expenditures		376,064		134,632		43,445		554,141		401,558		-		401,558

	September 30,		December 31,
	2020		2019
Total assets:
Regulated water	$	7,698,216	$	7,269,404
Regulated natural gas		5,269,844		-
Other		431,428		2,092,581
Consolidated	$	13,399,488	$	9,361,985