5. Discontinued Operations

9 Months Ended

Jun. 30, 2011

On May 12, 2011, we entered into a definitive agreement to sell all of our natural gas distribution assets located in Missouri, Illinois and Iowa to Liberty Energy (Midstates) Corporation, an affiliate of Algonquin Power & Utilities Corp. for an all cash price of approximately $124 million. The agreement contains terms and conditions customary for transactions of this type, including typical adjustments to the purchase price at closing, if applicable. The closing of the transaction is subject to the satisfaction of customary conditions including the receipt of applicable regulatory approvals.

As required under generally accepted accounting principles, the operating results of our Missouri, Illinois and Iowa operations have been aggregated and reported on the condensed consolidated statements of income as income from discontinued operations, net of income tax. Expenses related to general corporate overhead and interest expense allocated to their operations are not included in discontinued operations.

The tables below set forth selected financial and operational information related to net assets and operating results related to discontinued operations. Additionally, assets and liabilities related to our Missouri, Illinois and Iowa operations are classified as “held for sale” in other current assets and liabilities in our condensed consolidated balance sheets at June 30, 2011. Prior period revenues and expenses associated with these assets have been reclassified into discontinued operations. This reclassification had no impact on previously reported net income.

The following table presents statement of income data related to discontinued operations.

			Three Months Ended				Nine Months Ended
			June 30				June 30
			2011		2010		2011		2010
			(In thousands)

Operating revenues			$	11,524	$	8,952	$	71,047	$	62,121
Purchased gas cost				5,460		3,390		44,993		39,836

	Gross profit			6,064		5,562		26,054		22,285
Operating expenses				4,472		3,712		12,919		11,654
Operating income				1,592		1,850		13,135		10,631
Other nonoperating expense				(94)		(75)		(159)		(264)
Income from discontinued operations
	before income taxes			1,498		1,775		12,976		10,367
Income tax expense				590		700		5,122		4,094
		Net income	$	908	$	1,075	$	7,854	$	6,273


The following table presents balance sheet data related to assets held for sale.

		June 30,
		2011
		(In thousands)

Net plant, property & equipment		$	126,375
Gas stored underground			5,938
Other current assets			431
Deferred charges and other assets			197
	Assets held for sale	$	132,941

Accounts payable and accrued liabilities		$	1,808
Other current liabilities			5,086
Regulatory cost of removal obligation			11,435
Deferred credits and other liabilities			810
	Liabilities held for sale	$	19,139