We report certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We record cash and cash equivalents, accounts receivable and accounts payable at carrying value, which substantially approximates fair value due to the short-term nature of these assets and liabilities. For other financial assets and liabilities, we primarily use quoted market prices and other observable market pricing information to minimize the use of unobservable pricing inputs in our measurements when determining fair value. The methods used to determine fair value for our assets and liabilities are fully described in Note 2 to the financial statements in our Annual Report on Form 10-K for the fiscal year ended September 30, 2011. During the three and six months ended March 31, 2012, there were no changes in these methods.

Fair value measurements also apply to the valuation of our pension and postretirement plan assets. Current accounting guidance requires employers to annually disclose information about fair value measurements of the assets of a defined benefit pension or other postretirement plan. The fair value of these assets is presented in Note 9 to the financial statements in our Annual Report on Form 10-K for the fiscal year ending September 30, 2011.

The classification of our fair value measurements requires judgment regarding the degree to which market data are observable or corroborated by observable market data. Authoritative accounting literature establishes a fair value hierarchy that prioritizes the inputs used to measure fair value based on observable and unobservable data. The hierarchy categorizes the inputs into three levels, with the highest priority given to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), with the lowest priority given to unobservable inputs (Level 3). The following tables summarize, by level within the fair value hierarchy, our assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2012 and September 30, 2011. Assets and liabilities are categorized in their entirety based on the lowest level of input that is significant to the fair value measurement.

		Quoted		Significant		Significant
		Prices in		Other		Other
		Active		Observable		Unobservable		Netting and
		Markets		Inputs		Inputs		Cash		March 31,
		(Level 1)		(Level 2)⁽¹⁾		(Level 3)		Collateral⁽²⁾		2012
			(In thousands)

Assets:
Financial instruments
	Natural gas distribution segment	$	-	$	502	$	-	$	-	$	502
	Nonregulated segment		52,013		249,313		-		(287,608)		13,718
Total financial instruments			52,013		249,815		-		(287,608)		14,220

Hedged portion of gas stored
	underground		73,043		-		-		-		73,043
Available-for-sale securities
	Money market funds		-		3,358		-		-		3,358
	Registered investment companies		38,424		-		-		-		38,424
	Bonds		-		23,637		-		-		23,637
Total available-for-sale securities			38,424		26,995		-		-		65,419
Total assets		$	163,480	$	276,810	$	-	$	(287,608)	$	152,682

Liabilities:
Financial instruments
	Natural gas distribution segment	$	-	$	48,034	$	-	$	-	$	48,034
	Nonregulated segment		76,476		227,424		-		(293,304)		10,596
Total liabilities		$	76,476	$	275,458	$	-	$	(293,304)	$	58,630

		Quoted		Significant		Significant
		Prices in		Other		Other
		Active		Observable		Unobservable		Netting and
		Markets		Inputs		Inputs		Cash		September 30,
		(Level 1)		(Level 2)⁽¹⁾		(Level 3)		Collateral⁽³⁾		2011
			(In thousands)

Assets:
Financial instruments
	Natural gas distribution segment	$	-	$	1,841	$	-	$	-	$	1,841
	Nonregulated segment		15,262		97,396		-		(95,156)		17,502
Total financial instruments			15,262		99,237		-		(95,156)		19,343

Hedged portion of gas stored
	underground		47,940		-		-		-		47,940
Available-for-sale securities
	Money market funds		-		1,823		-		-		1,823
	Registered investment companies		36,444		-		-		-		36,444
	Bonds		-		14,366		-		-		14,366
Total available-for-sale securities			36,444		16,189		-		-		52,633
Total assets		$	99,646	$	115,426	$	-	$	(95,156)	$	119,916

Liabilities:
Financial instruments
	Natural gas distribution segment	$	-	$	81,118	$	-	$	-	$	81,118
	Nonregulated segment		22,091		115,617		-		(123,943)		13,765
Total liabilities		$	22,091	$	196,735	$	-	$	(123,943)	$	94,883

(1) Our Level 2 measurements primarily consist of non-exchange-traded financial instruments, such as over-the-counter options and swaps where market data for pricing is observable. The fair values for these assets and liabilities are determined using a market-based approach in which observable market prices are adjusted for criteria specific to each instrument, such as the strike price, notional amount or basis differences. This level also includes municipal and corporate bonds where market data for pricing is observable.

(2) This column reflects adjustments to our gross financial instrument assets and liabilities to reflect netting permitted under our master netting agreements and the relevant authoritative accounting literature. In addition, as of March 31, 2012, we had $5.7 million of cash held in margin accounts to collateralize certain financial instruments. Of this amount, $2.8 million was used to offset current risk management liabilities under master netting arrangements and the remaining $2.9 million is classified as current risk management assets.

(3) This column reflects adjustments to our gross financial instrument assets and liabilities to reflect netting permitted under our master netting agreements and the relevant authoritative accounting literature. In addition, as of September 30, 2011 we had $28.8 million of cash held in margin accounts to collateralize certain financial instruments. Of this amount, $12.4 million was used to offset current risk management liabilities under master netting arrangements and the remaining $16.4 million is classified as current risk management assets.

				Gross		Gross
		Amortized		Unrealized		Unrealized		Fair
		Cost		Gain		Loss		Value
		(In thousands)
As of March 31, 2012:
	Domestic equity mutual funds	$	24,471	$	7,821	$	-	$	32,292
	Foreign equity mutual funds		5,327		805		-		6,132
	Bonds		23,525		127		(15)		23,637
	Money market funds		3,358		-		-		3,358
		$	56,681	$	8,753	$	(15)	$	65,419
As of September 30, 2011:
	Domestic equity mutual funds	$	27,748	$	4,074	$	-	$	31,822
	Foreign equity mutual funds		4,597		267		(242)		4,622
	Bonds		14,390		10		(34)		14,366
	Money market funds		1,823		-		-		1,823
		$	48,558	$	4,351	$	(276)	$	52,633

At March 31, 2012 and September 30, 2011, our available-for-sale securities included $41.8 million and $38.3 million related to assets held in separate rabbi trusts for our supplemental executive benefit plans. At March 31, 2012 we maintained investments in bonds that have contractual maturity dates ranging from April 2012 through July 2016.

These securities are reported at market value with unrealized gains and losses shown as a component of accumulated other comprehensive income (loss). We regularly evaluate the performance of these investments on a fund by fund basis for impairment, taking into consideration the fund's purpose, volatility and current returns. If a determination is made that a decline in fair value is other than temporary, the related fund is written down to its estimated fair value and the other-than-temporary impairment is recognized in the income statement.

We maintained several bonds with a cumulative fair value of $4.4 million in an unrealized loss position of less than $0.1 million as of March 31, 2012. These bonds have been in an unrealized loss position for less than twelve months. Based upon our intent and ability to hold these investments, our ability to direct the source of payments in order to maximize the life of the portfolio, the short-term nature of the decline in fair value and the fact that these bonds are investment grade, we do not consider this impairment to be other than temporary as of March 31, 2012.

Our debt is recorded at carrying value. The fair value of our debt is determined using third party market value quotations. The following table presents the carrying value and fair value of our debt as of March 31, 2012:

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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