The consolidated entity has four reportable operating segments as follows: 

> Retail Energy  is responsible for selling natural gas, electricity and energy-related products and services to residential and small business customers. 

> Merchant Energy  is responsible for developing, operating and maintaining power generation assets and managing the risks associated with the procurement and delivery of gas and electricity for its wholesale portfolio and for the Retail Energy segment. Merchant Energy also sells natural gas and electricity to business customers and provides energy efficiency and carbon management services. Merchant Energy is also now responsible for managing and maintaining the Loy Yang A power station and adjacent brown coal mine. 

> Upstream Gas  Is responsible for investments and operations in gas exploration, development and production tenements, development and operation of gas storage facilities, as well as for exploration and development of geothermal renewable energy sources. 

> Energy Investments  includes equity accounted investments in the ActewAGL Retail Partnership and Diamantina Holding Company Pty Limited. The equity accounted investment in Great Energy Alliance Corporation Pty Limited (GEAC) was also included in this segment up until 29 June 2012, when AGL completed the acquisition of GEAC, increasing its ownership from 32.54% to 100%. GEAC owns the Loy Yang A power station and adjacent brown coal mine which are now reported in the Merchant Energy operating segment. 

No operating segments have been aggregated to form the above reportable operating segments. 

In the segment financial results, the ‘Other’ category consists of the various Corporate activities which includes the head office and central support functions. Corporate is not considered a reportable operating segment. 

## Segment financial results 

The measurement of segment results is in line with the basis of information presented to the Board of Directors for internal management reporting purposes. The performance of each segment is measured based on their ‘Operating EBIT contribution’ to the consolidated entity. Certain items of income and expense are excluded from the segment results to show a measure of underlying performance. These items include changes in fair value of financial instruments and significant items. 

Transfer prices between operating segments are on an arm’s- length basis in a manner similar to transactions with third parties. Inter-segment revenue is eliminated on consolidation. 

The accounting policies of the reportable segments are the same as the consolidated entity’s accounting policies. 

Information regarding the consolidated entity’s reportable segments is presented below. 

