Business Segments

3 Months Ended

Apr. 30, 2011

7. Business Segments

We have two reportable business segments, regulated utility and non-utility activities. These segments were identified based on products and services, regulatory environments and our current corporate organization and business decision-making activities. Operations of our regulated utility segment are conducted by the parent company. Operations of our non-utility activities segment are comprised of our equity method investments in joint ventures that are held by our wholly owned subsidiaries.

Operations of the regulated utility segment are reflected in “Operating Income” in the consolidated statements of income. Operations of the non-utility activities segment are included in the consolidated statements of income in “Income from equity method investments” and “Non-operating income.”

We evaluate the performance of the regulated utility segment based on margin, operations and maintenance expenses and operating income. We evaluate the performance of the non-utility activities segment based on earnings from the ventures. The basis of segmentation and the basis of the measurement of segment profit or loss are the same as reported in the consolidated financial statements in our Form 10-K for the year ended October 31, 2010.

Operations by segment for the three months and six months ended April 30, 2011 and 2010 are presented below.

		Regulated				Non-utility
In thousands		Utility				Activities				Total
		2011		2010		2011		2010		2011		2010

Three Months
Revenues from external customers	$	392,567	$	472,846	$	-	$	-	$	392,567	$	472,846
Margin		172,931		168,678		-		-		172,931		168,678
Operations and maintenance expenses		58,936		57,503		17		111		58,953		57,614
Gain from sale of interest in equity
method investment		-		-		-		-		-		-
Income from equity method investments		-		-		12,384		13,309		12,384		13,309
Operating income (loss) before income taxes		79,106		77,934		(24)		(118)		79,082		77,816
Income before income taxes		65,932		64,250		12,371		13,190		78,303		77,440

Six Months
Revenues from external customers	$	1,044,623	$	1,146,582	$	-	$	-	$	1,044,623	$	1,146,582
Margin		402,937		391,620		-		-		402,937		391,620
Operations and maintenance expenses		109,994		109,542		47		234		110,041		109,776
Gain from sale of interest in equity
method investment		-		-		-		49,674		-		49,674
Income from equity method investments		-		-		20,140		25,142		20,140		25,142
Operating income (loss) before income taxes		221,910		215,897		(143)		(330)		221,767		215,567
Income before income taxes		197,621		190,849		20,008		74,488		217,629		265,337

Reconciliations to the consolidated statements of income for the three months and six months ended April 30, 2011 and 2010 are presented below.

In thousands		Three Months				Six Months
		2011		2010		2011		2010
Operating Income:
Segment operating income before
income taxes	$	79,082	$	77,816	$	221,767	$	215,567
Utility income taxes		(26,179)		(25,709)		(78,114)		(75,871)
Non-utility activities before income taxes		24		118		143		330
Operating income	$	52,927	$	52,225	$	143,796	$	140,026

Net Income:
Income before income taxes for
reportable segments	$	78,303	$	77,440	$	217,629	$	265,337
Income taxes		(30,895)		(30,615)		(85,781)		(104,763)
Net income	$	47,408	$	46,825	$	131,848	$	160,574