5. Discontinued Operations

3 Months Ended

Dec. 31, 2011

On May 12, 2011, we entered into a definitive agreement to sell substantially 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 a 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, which we currently anticipate will occur during fiscal 2012.

As required under generally accepted accounting principles, the operating results of our Missouri, Illinois and Iowa operations have been aggregated and reported on the 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 consolidated balance sheets at December 31, 2011 and September 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
			December 31
			2011		2010
			(In thousands)

Operating revenues			$	23,451	$	23,733
Purchased gas cost				14,951		14,897

	Gross profit			8,500		8,836
Operating expenses				4,174		4,016
Operating income				4,326		4,820
Other nonoperating expense				(48)		(33)
Income from discontinued
	operations before income taxes			4,278		4,787
Income tax expense				1,559		1,890
		Net income	$	2,719	$	2,897

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



		December 31,		September 30,
		2011		2011
		(In thousands)

Net plant, property & equipment		$	127,227	$	127,577
Gas stored underground			14,257		11,931
Other current assets			3,773		786
Deferred charges and other assets			62		277
	Assets held for sale	$	145,319	$	140,571

Accounts payable and accrued liabilities		$	9,945	$	1,917
Other current liabilities			5,459		4,877
Regulatory cost of removal obligation			10,367		10,498
Deferred credits and other liabilities			1,175		1,153
	Liabilities held for sale	$	26,946	$	18,445