Business Segments

9 Months Ended

Jul. 31, 2014

Segment Reporting [Abstract]

Business Segments

Business Segments

We have two reportable business segments, regulated utility and non-utility activities. Our segments are identified based on products and services, regulatory environments and our current corporate organization and business decision-making activities. The regulated utility segment is the gas distribution business, where we include the operations of merchandising and its related service work and home warranty programs, with activities conducted by the parent company. Although the operations of our regulated utility segment are located in three states under the jurisdiction of individual state regulatory commissions, the operations are managed as one unit having similar economic and risk characteristics within one company. Operations of our non-utility activities segment are comprised of our equity method investments in joint ventures that are held by our wholly owned subsidiaries.

Operations of the regulated utility segment are reflected in “Operating Income” in the Condensed Consolidated Statements of Operations and Comprehensive Income. Operations of the non-utility activities segment are included in the Condensed Consolidated Statements of Operations and Comprehensive Income in “Other Income (Expense)” in “Income from equity method investments” and “Non-operating income.”

Our chief operating decision maker is the executive management team. We produce consolidated financial information internally that is supplemented with separate non-utility activity reporting that is used regularly to make operating decisions and assess performance of the two business segments. We evaluate the performance of the regulated utility segment based on margin, operations and maintenance expenses and operating income. We evaluate the performance of the non-utility activities segment based on earnings from and our cash flows in the ventures. The basis of segmentation and the basis of the measurement of segment profit or loss are the same as reported in the Consolidated Financial Statements in our Form 10-K for the year ended October 31, 2013.

Operations by segment for the three months and nine months ended July 31, 2014 and 2013 are presented below.

In thousands	Regulated Utility						Non-utility Activities						Total
	2014			2013			2014			2013			2014			2013
Three Months
Revenues from external customers	$	164,187		$	162,943		$	—		$	—		$	164,187		$	162,943
Margin	104,847			97,000			—			—			104,847			97,000
Operations and maintenance expenses	68,605			62,950			56			35			68,661			62,985
Income from equity method investments	—			—			5,043			3,652			5,043			3,652
Operating loss before income taxes	(3,070		)	(2,856		)	(126		)	(117		)	(3,196		)	(2,973		)
Income (loss) before income taxes	(16,867		)	(8,673		)	4,917			3,536			(11,950		)	(5,137		)
Nine Months
Revenues from external customers	$	1,284,167		$	1,078,229		$	—		$	—		$	1,284,167		$	1,078,229
Margin	577,882			512,480			—			—			577,882			512,480
Operations and maintenance expenses	199,437			183,869			102			155			199,539			184,024
Income from equity method investments	—			—			29,345			23,244			29,345			23,244
Operating income (loss) before income taxes	262,540			219,540			(260		)	(322		)	262,280			219,218
Income before income taxes	223,401			205,882			29,085			22,922			252,486			228,804

Reconciliations to the Condensed Consolidated Statements of Operations and Comprehensive Income for the three months and nine months ended July 31, 2014 and 2013 are presented below.

In thousands	Three Months						Nine Months
	2014			2013			2014			2013
Operating Income (Loss):
Segment operating income (loss) before income taxes	$	(3,196	)	$	(2,973	)	$	262,280		$	219,218
Utility income taxes	6,324			3,447			(89,668		)	(81,232		)
Non-utility activities before income taxes	126			117			260			322
Operating income	$	3,254		$	591		$	172,872		$	138,308
Net Income (Loss):
Income (loss) before income taxes for reportable segments	$	(11,950	)	$	(5,137	)	$	252,486		$	228,804
Income taxes	4,606			2,844			(99,718		)	(89,384		)
Net income (loss)	$	(7,344	)	$	(2,293	)	$	152,768		$	139,420