Segment Information | Segment Information We operate the Company through the following three segments: • The regulated distribution segment , which includes our regulated natural gas distribution and related sales operations, • The regulated pipeline 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 regulated distribution segment operations are geographically dispersed, they are reported as a single segment as each regulated 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, 2014 . We evaluate performance based on net income or loss of the respective operating units. Income statements for the three and nine month periods ended June 30, 2015 and 2014 by segment are presented in the following tables: Three Months Ended June 30, 2015 Regulated Distribution Regulated Pipeline Nonregulated Eliminations Consolidated (In thousands) Operating revenues from external parties $ 415,160 $ 25,859 $ 245,382 $ — $ 686,401 Intersegment revenues 1,634 71,149 33,387 (106,170 ) — 416,794 97,008 278,769 (106,170 ) 686,401 Purchased gas cost 149,775 — 260,990 (106,037 ) 304,728 Gross profit 267,019 97,008 17,779 (133 ) 381,673 Operating expenses Operation and maintenance 98,552 26,572 7,456 (133 ) 132,447 Depreciation and amortization 55,491 11,816 1,137 — 68,444 Taxes, other than income 56,176 6,193 806 — 63,175 Total operating expenses 210,219 44,581 9,399 (133 ) 264,066 Operating income 56,800 52,427 8,380 — 117,607 Miscellaneous income (expense) 1,045 (211 ) 345 (545 ) 634 Interest charges 19,961 8,299 240 (545 ) 27,955 Income before income taxes 37,884 43,917 8,485 — 90,286 Income tax expense 15,420 15,349 3,236 — 34,005 Net income $ 22,464 $ 28,568 $ 5,249 $ — $ 56,281 Capital expenditures $ 170,134 $ 55,914 $ (209 ) $ — $ 225,839 Three Months Ended June 30, 2014 Regulated Regulated Nonregulated Eliminations Consolidated (In thousands) Operating revenues from external parties $ 516,644 $ 24,990 $ 401,536 $ — $ 943,170 Intersegment revenues 1,063 62,199 63,949 (127,211 ) — 517,707 87,189 465,485 (127,211 ) 943,170 Purchased gas cost 260,042 — 450,672 (127,077 ) 583,637 Gross profit 257,665 87,189 14,813 (134 ) 359,533 Operating expenses Operation and maintenance 92,994 23,570 9,129 (134 ) 125,559 Depreciation and amortization 52,542 10,281 1,132 — 63,955 Taxes, other than income 57,596 5,054 764 — 63,414 Total operating expenses 203,132 38,905 11,025 (134 ) 252,928 Operating income 54,533 48,284 3,788 — 106,605 Miscellaneous income (expense) 678 (489 ) 1,018 (1,581 ) (374 ) Interest charges 23,649 9,162 610 (1,581 ) 31,840 Income before income taxes 31,562 38,633 4,196 — 74,391 Income tax expense 13,033 13,695 1,942 — 28,670 Net income $ 18,529 $ 24,938 $ 2,254 $ — $ 45,721 Capital expenditures $ 146,860 $ 45,658 $ 1,073 $ — $ 193,591 Nine Months Ended June 30, 2015 Regulated Regulated Nonregulated Eliminations Consolidated (In thousands) Operating revenues from external parties $ 2,389,037 $ 70,887 $ 1,025,310 $ — $ 3,485,234 Intersegment revenues 5,142 201,418 154,069 (360,629 ) — 2,394,179 272,305 1,179,379 (360,629 ) 3,485,234 Purchased gas cost 1,397,113 — 1,122,655 (360,230 ) 2,159,538 Gross profit 997,066 272,305 56,724 (399 ) 1,325,696 Operating expenses Operation and maintenance 288,962 74,029 21,897 (399 ) 384,489 Depreciation and amortization 165,730 34,945 3,384 — 204,059 Taxes, other than income 162,759 16,296 2,551 — 181,606 Total operating expenses 617,451 125,270 27,832 (399 ) 770,154 Operating income 379,615 147,035 28,892 — 555,542 Miscellaneous income (expense) (1,221 ) (842 ) 897 (1,468 ) (2,634 ) Interest charges 60,914 25,014 706 (1,468 ) 85,166 Income before income taxes 317,480 121,179 29,083 — 467,742 Income tax expense 121,776 42,894 11,512 — 176,182 Net income $ 195,704 $ 78,285 $ 17,571 $ — $ 291,560 Capital expenditures $ 482,371 $ 185,028 $ 84 $ — $ 667,483 Nine Months Ended June 30, 2014 Regulated Regulated Nonregulated Eliminations Consolidated (In thousands) Operating revenues from external parties $ 2,648,505 $ 67,162 $ 1,436,215 $ — $ 4,151,882 Intersegment revenues 4,027 164,983 223,916 (392,926 ) — 2,652,532 232,145 1,660,131 (392,926 ) 4,151,882 Purchased gas cost 1,710,508 — 1,589,163 (392,556 ) 2,907,115 Gross profit 942,024 232,145 70,968 (370 ) 1,244,767 Operating expenses Operation and maintenance 289,433 57,465 19,463 (370 ) 365,991 Depreciation and amortization 152,113 30,223 3,395 — 185,731 Taxes, other than income 155,286 8,485 1,869 — 165,640 Total operating expenses 596,832 96,173 24,727 (370 ) 717,362 Operating income 345,192 135,972 46,241 — 527,405 Miscellaneous income (expense) 304 (2,751 ) 1,785 (3,360 ) (4,022 ) Interest charges 69,802 27,274 1,840 (3,360 ) 95,556 Income before income taxes 275,694 105,947 46,186 — 427,827 Income tax expense 105,665 37,454 18,604 — 161,723 Net income $ 170,029 $ 68,493 $ 27,582 $ — $ 266,104 Capital expenditures $ 413,921 $ 137,579 $ 1,100 $ — $ 552,600 Balance sheet information at June 30, 2015 and September 30, 2014 by segment is presented in the following tables: June 30, 2015 Regulated Regulated Nonregulated Eliminations Consolidated (In thousands) ASSETS Property, plant and equipment, net $ 5,543,386 $ 1,613,182 $ 55,520 $ — $ 7,212,088 Investment in subsidiaries 1,028,457 — (2,096 ) (1,026,361 ) — Current assets Cash and cash equivalents 35,288 — 7,865 — 43,153 Assets from risk management activities 780 — 10,806 — 11,586 Other current assets 375,213 20,100 497,871 (331,274 ) 561,910 Intercompany receivables 820,587 — — (820,587 ) — Total current assets 1,231,868 20,100 516,542 (1,151,861 ) 616,649 Goodwill 574,816 132,502 34,711 — 742,029 Noncurrent assets from risk management activities 1,109 — — — 1,109 Deferred charges and other assets 291,740 15,305 5,569 — 312,614 $ 8,671,376 $ 1,781,089 $ 610,246 $ (2,178,222 ) $ 8,884,489 CAPITALIZATION AND LIABILITIES Shareholders’ equity $ 3,238,255 $ 560,898 $ 467,559 $ (1,028,457 ) $ 3,238,255 Long-term debt 2,455,303 — — — 2,455,303 Total capitalization 5,693,558 560,898 467,559 (1,028,457 ) 5,693,558 Current liabilities Short-term debt 570,977 — — (319,000 ) 251,977 Liabilities from risk management activities 4,916 — — — 4,916 Other current liabilities 551,102 17,850 100,910 (10,178 ) 659,684 Intercompany payables — 786,493 34,094 (820,587 ) — Total current liabilities 1,126,995 804,343 135,004 (1,149,765 ) 916,577 Deferred income taxes 1,014,432 415,687 (1,029 ) — 1,429,090 Noncurrent liabilities from risk management activities 47,224 — — — 47,224 Regulatory cost of removal obligation 432,153 — — — 432,153 Pension and postretirement liabilities 318,140 — — — 318,140 Deferred credits and other liabilities 38,874 161 8,712 — 47,747 $ 8,671,376 $ 1,781,089 $ 610,246 $ (2,178,222 ) $ 8,884,489 September 30, 2014 Regulated Regulated Nonregulated Eliminations Consolidated (In thousands) ASSETS Property, plant and equipment, net $ 5,202,761 $ 1,464,572 $ 58,573 $ — $ 6,725,906 Investment in subsidiaries 952,171 — (2,096 ) (950,075 ) — Current assets Cash and cash equivalents 33,303 — 8,955 — 42,258 Assets from risk management activities 23,102 — 22,725 — 45,827 Other current assets 490,408 14,009 526,161 (342,823 ) 687,755 Intercompany receivables 790,442 — — (790,442 ) — Total current assets 1,337,255 14,009 557,841 (1,133,265 ) 775,840 Goodwill 574,816 132,502 34,711 — 742,029 Noncurrent assets from risk management activities 13,038 — — — 13,038 Deferred charges and other assets 309,965 21,826 6,100 — 337,891 $ 8,390,006 $ 1,632,909 $ 655,129 $ (2,083,340 ) $ 8,594,704 CAPITALIZATION AND LIABILITIES Shareholders’ equity $ 3,086,232 $ 482,612 $ 469,559 $ (952,171 ) $ 3,086,232 Long-term debt 2,455,986 — — — 2,455,986 Total capitalization 5,542,218 482,612 469,559 (952,171 ) 5,542,218 Current liabilities Short-term debt 522,695 — — (326,000 ) 196,695 Liabilities from risk management activities 1,730 — — — 1,730 Other current liabilities 559,765 24,790 142,397 (14,727 ) 712,225 Intercompany payables — 763,635 26,807 (790,442 ) — Total current liabilities 1,084,190 788,425 169,204 (1,131,169 ) 910,650 Deferred income taxes 913,260 361,688 11,668 — 1,286,616 Noncurrent liabilities from risk management activities 20,126 — — — 20,126 Regulatory cost of removal obligation 445,387 — — — 445,387 Pension and postretirement liabilities 340,963 — — — 340,963 Deferred credits and other liabilities 43,862 184 4,698 — 48,744 $ 8,390,006 $ 1,632,909 $ 655,129 $ (2,083,340 ) $ 8,594,704 |