| Exhibit 99.1                                     |   |                            |    |
|--------------------------------------------------|--------|---------------------------------|---------|
|                                             |   |                            |    |
|                                             |   |                            |    |
| Selected Financial Data                          |   |                            |    |
|                                             |   |                            |    |
| Laclede Gas Company                              |   |                            |    |
|                                             |   |                            |    |
|                                             |   |                            |    |
|                                             |   | Fiscal Years Ended September 30 |    |
| (Thousands)                                      |   | 2010                            |    | 2009 |   | 2008 |   | 2007 |   | 2006 |   |
| Summary of Operations                            |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Revenues:                              |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility                                          |   | $                               | 864,297 |   | $ | 1,053,993 |   | $ | 1,128,287 |   | $ | 1,131,554 |   | $ | 1,141,011 |   |
| Other                                            |   |                            | 10,327  |   |   | 2,246 |   |   | 2,693 |   |   | 3,415 |   |   | 2,305 |   |
| Total Operating Revenues                         |   |                            | 874,624 |   |   | 1,056,239 |   |   | 1,130,980 |   |   | 1,134,969 |   |   | 1,143,316 |   |
|                                             |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Expenses:                              |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility                                          |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Natural and propane gas                          |   |                            | 519,905 |   |   | 699,984 |   |   | 770,097 |   |   | 797,924 |   |   | 821,721 |   |
| Other operation expenses                         |   |                            | 141,995 |   |   | 146,542 |   |   | 144,611 |   |   | 131,798 |   |   | 128,180 |   |
| Maintenance                                      |   |                            | 27,244  |   |   | 27,818 |   |   | 25,827 |   |   | 24,306 |   |   | 21,198 |   |
| Depreciation and amortization                    |   |                            | 37,572  |   |   | 36,751 |   |   | 35,303 |   |   | 34,080 |   |   | 30,904 |   |
| Taxes, other than income taxes                   |   |                            | 61,407  |   |   | 68,639 |   |   | 69,023 |   |   | 68,361 |   |   | 71,038 |   |
| Total Utility Operating Expenses                 |   |                            | 788,123 |   |   | 979,734 |   |   | 1,044,861 |   |   | 1,056,469 |   |   | 1,073,041 |   |
| Other                                            |   |                            | 4,343   |   |   | 2,238 |   |   | 2,641 |   |   | 2,914 |   |   | 2,316 |   |
| Total Operating Expenses                         |   |                            | 792,466 |   |   | 981,972 |   |   | 1,047,502 |   |   | 1,059,383 |   |   | 1,075,357 |   |
| Operating Income                                 |   |                            | 82,158  |   |   | 74,267 |   |   | 83,478 |   |   | 75,586 |   |   | 67,959 |   |
| Allowance for Funds Used During Construction     |   |                            | (112    | )  |   | (152 | ) |   | (72 | )  |   | (17 | ) |   | (45 | ) |
| Other Income and (Income Deductions) – Net |   |                            | 2,681   |   |   | 3,280 |   |   | 1,278 |   |   | 4,565 |   |   | 4,163 |   |
| Interest Charges:                                |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest on long-term debt                       |   |                            | 24,583  |   |   | 24,583 |   |   | 19,851 |   |   | 22,502 |   |   | 22,329 |   |
| Other interest charges                           |   |                            | 2,269   |   |   | 5,770 |   |   | 10,363 |   |   | 11,101 |   |   | 10,236 |   |
| Total Interest Charges                           |   |                            | 26,852  |   |   | 30,353 |   |   | 30,214 |   |   | 33,603 |   |   | 32,565 |   |
| Income Before Income Taxes                       |   |                            | 57,875  |   |   | 47,042 |   |   | 54,470 |   |   | 46,531 |   |   | 39,512 |   |
| Income Tax Expense                               |   |                            | 18,150  |   |   | 13,859 |   |   | 15,264 |   |   | 14,047 |   |   | 10,632 |   |
| Net Income                                       |   |                            | 39,725  |   |   | 33,183 |   |   | 39,206 |   |   | 32,484 |   |   | 28,880 |   |
| Dividends on Redeemable Preferred Stock          |   |                            | — |   |   | 15 |   |   | 35 |   |   | 43 |   |   | 48 |   |
| Earnings Applicable to Common Stock              |   | $                               | 39,725  |   | $ | 33,168 |   | $ | 39,171 |   | $ | 32,441 |   | $ | 28,832 |   |

| Selected Financial Data (continued)         |   |                            |      |
|---------------------------------------------|--------|---------------------------------|-----------|
|                                        |   |                            |      |
| Laclede Gas Company                         |   |                            |      |
|                                        |   |                            |      |
|                                        |   |                            |      |
|                                        |   | Fiscal Years Ended September 30 |      |
| (Thousands)                                 |   | 2010                            |      | 2009 |   | 2008 |   | 2007 |   | 2006 |   |
|                                        |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends Declared –                  |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Stock                                |   | $                               | 35,195    |   | $ | 34,108 |   | $ | 32,811 |   | $ | 31,520 |   | $ | 30,049 |   |
|                                        |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility Plant                               |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross Plant – End of Period           |   | $                               | 1,326,284 |   | $ | 1,280,238 |   | $ | 1,229,174 |   | $ | 1,187,828 |   | $ | 1,149,104 |   |
| Net Plant – End of Period             |   |                            | 884,084   |   |   | 855,929 |   |   | 823,197 |   |   | 793,794 |   |   | 763,827 |   |
| Capital Expenditures                        |   |                            | 56,234    |   |   | 51,384 |   |   | 55,304 |   |   | 56,434 |   |   | 57,925 |   |
| Property Retirements                        |   |                            | 10,946    |   |   | 9,732 |   |   | 15,629 |   |   | 16,331 |   |   | 22,588 |   |
| Total Assets – End of Period          |   | $                               | 1,658,452 |   | $ | 1,600,287 |   | $ | 1,625,815 |   | $ | 1,431,203 |   | $ | 1,385,140 |   |
|                                        |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capitalization – End of Period        |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Stock and Paid-In Capital            |   | $                               | 208,154   |   | $ | 203,754 |   | $ | 157,883 |   | $ | 151,510 |   | $ | 145,527 |   |
| Retained Earnings                           |   |                            | 205,980   |   |   | 201,450 |   |   | 202,535 |   |   | 195,728 |   |   | 194,807 |   |
| Accumulated Other Comprehensive Loss        |   |                            | (2,875    | ) |   | (2,619 | ) |   | (1,790 | )  |   | (1,727 | ) |   | (834 | ) |
|     Common Stock Equity |   |                            | 411,259   |   |   | 402,585 |   |   | 358,628 |   |   | 345,511 |   |   | 339,500 |   |
| Redeemable Preferred Stock                  |   |                            | —   |   |   | — |   |   | 467 |   |   | 627 |   |   | 787 |   |
| Long-Term Debt                              |   |                            | 364,298   |   |   | 389,240 |   |   | 389,181 |   |   | 309,122 |   |   | 349,041 |   |
| Total Capitalization                        |   | $                               | 775,557   |   | $ | 791,825 |   | $ | 748,276 |   | $ | 655,260 |   | $ | 689,328 |   |
|                                        |   |                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |

| • | weather conditions and catastrophic events, particularly severe weather in the natural gas producing areas of the country;                                                                                                                      |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | volatility in gas prices, particularly sudden and sustained changes in natural gas prices, including the related impact on margin deposits associated with the use of natural gas derivative instruments;                                       |
| • | the impact of changes and volatility in natural gas prices on our competitive position in relation to suppliers of alternative heating sources, such as electricity;                                                                            |
| • | changes in gas supply and pipeline availability, particularly those changes that impact supply for and access to our service area;                                                                                                              |
| • | legislative, regulatory and judicial mandates and decisions, some of which may be retroactive, including those affecting                                                                                                                        |
|    | •                                                                                                                                                                                                                                         | allowed rates of return |
|    | •                                                                                                                                                                                                                                         | incentive regulation |
|    | •                                                                                                                                                                                                                                         | industry structure |
|    | •                                                                                                                                                                                                                                         | purchased gas adjustment provisions |
|    | •                                                                                                                                                                                                                                         | rate design structure and implementation |
|    | •                                                                                                                                                                                                                                         | regulatory assets |
|    | •                                                                                                                                                                                                                                         | franchise renewals |
|    | •                                                                                                                                                                                                                                         | environmental or safety matters, including the potential impact of legislative and regulatory actions related to climate change |
|    | •                                                                                                                                                                                                                                         | taxes |
|    | •                                                                                                                                                                                                                                         | pension and other postretirement benefit liabilities and funding obligations |
|    | •                                                                                                                                                                                                                                         | accounting standards, including the effect of potential changes relative to adoption of or convergence with international accounting standards; |
| • | the results of litigation;                                                                                                                                                                                                                      |
| • | retention of, ability to attract, ability to collect from, and conservation efforts of, customers;                                                                                                                                              |
| • | capital and energy commodity market conditions, including the ability to obtain funds with reasonable terms for necessary capital expenditures and general operations and the terms and conditions imposed for obtaining sufficient gas supply; |
| • | discovery of material weakness in internal controls; and                                                                                                                                                                                        |
| • | employee workforce issues.                                                                                                                                                                                                                      |

| • | the Utility’s ability to recover the costs of purchasing and distributing natural gas from its customers;                                                                                   |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the impact of weather and other factors, such as customer conservation, on revenues and expenses;                                                                                                 |
| • | changes in the regulatory environment at the federal, state, and local levels, as well as decisions by regulators, that impact the Utility’s ability to earn its authorized rate of return; |
| • | the Utility’s ability to access credit markets and maintain working capital sufficient to meet operating requirements; and,                                                                 |
| • | the effect of natural gas price volatility on the business.                                                                                                                                       |

Regulatory and Other Matters

Liquidity and Capital Resources

|   | • | income from a non-regulated propane transaction in the wholesale market totaling $6.0 million;                                                       |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | decreases in operation and maintenance expenses totaling $5.1 million, including a lower provision for uncollectible accounts totaling $3.4 million; |
|   | • | higher Infrastructure System Replacement Surcharge (ISRS) revenues totaling $3.2 million; and,                                                       |
|   | • | the benefit of the general rate increase, effective September 1, 2010, totaling $2.5 million.                                                        |

|   | • | lower income from off-system sales and capacity release totaling $4.3 million; and,      |
|--------|---------|------------------------------------------------------------------------------------------|
|   | • | the effect of lower system gas sales volumes and other variations totaling $2.8 million. |

|   | • | increases in operation and maintenance expenses, excluding the provision for uncollectible accounts, totaling $4.9 million;                                              |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | the effect of lower system gas sales volumes and other variations totaling $2.0 million;                                                                                 |
|   | • | the effect of the recognition of previously unrecognized tax benefits and the reversal of related expenses recorded during fiscal year 2008, totaling $1.6 million; and, |
|   | • | an increase in depreciation and amortization expense totaling $1.4 million.                                                                                              |

| (Millions)                                                                                                                                          |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| Lower wholesale gas costs passed on to Utility customers (subject to prudence review by the MoPSC)                                                  |   | $      | (141.1 | ) |
| Lower off-system sales volumes (reflecting less favorable market conditions as described in greater detail in the  Results of Operations) |   |   | (42.8  | ) |
| Lower system sales volumes and other variations                                                                                                     |   |   | (10.2  | ) |
| Higher ISRS revenues                                                                                                                                |   |   | 3.2    |   |
| General rate increase, effective September 1, 2010                                                                                        |   |   | 2.5    |   |
| Lower prices charged for off-system sales                                                                                                           |   |   | (1.3   | ) |
|       Total Variation                                                                                                 |   | $      | (189.7 | ) |

| (Millions)                                                                                                                                           |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| Lower prices charged for off-system sales                                                                                                            |   | $      | (64.2  | ) |
| Lower wholesale gas costs passed on to Utility customers (subject to prudence review by the MoPSC)                                                   |   |   | (19.0  | ) |
| Higher off-system sales volumes (reflecting more favorable market conditions as described in greater  detail in the Results of Operations) |   |   | 16.6   |   |
| Lower system sales volumes and other variations                                                                                                      |   |   | (11.5  | ) |
| Higher ISRS revenues                                                                                                                                 |   |   | 3.8    |   |
|       Total Variation                                                                                                  |   | $      | (74.3  | ) |

|   | Accounts Receivable and Allowance for Doubtful Accounts – Trade accounts receivable are recorded at the amounts due from customers, including unbilled amounts. Estimates of the collectibility of trade accounts receivable are based on historical trends, age of receivables, economic conditions, credit risk of specific customers, and other factors. Accounts receivable are written off against the allowance for doubtful accounts when they are deemed to be uncollectible. The Utility’s provision for uncollectible accounts includes the amortization of previously deferred uncollectible expenses, as approved by the MoPSC. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Employee Benefits and Postretirement Obligations – Pension and postretirement obligations are calculated by actuarial consultants that utilize several statistical factors and other assumptions provided by management related to future events, such as discount rates, returns on plan assets, compensation increases, and mortality rates. For the Utility, the amount of expense recognized and the amounts reflected in other comprehensive income are dependent upon the regulatory treatment provided for such costs, as discussed further below. Certain liabilities related to group medical benefits and workers’ compensation claims, portions of which are self-insured and/or contain “stop-loss” coverage with third-party insurers to limit exposure, are established based on historical trends. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Pension Plan Benefits:                                                                                                                                                                                                       |   |            |   |   |   |          |           |   |   |          |           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|--------|--------|---------------|----------------|--------|--------|---------------|----------------|
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |
|                                                                                                                                                                                                                         |   |            |   |   |   | Estimated     |           |   |   | Estimated     |           |
|                                                                                                                                                                                                                         |   |            |   |   |   | Increase/     |           |   |   | Increase/     |           |
|                                                                                                                                                                                                                         |   |            |   |   |   | (Decrease) to |           |   |   | (Decrease) to |           |
|                                                                                                                                                                                                                         |   |            |   |   |   | Projected     |           |   |   | Annual        |           |
|                                                                                                                                                                                                                         |   |            |   |   |   | Benefit       |           |   |   | Net Pension   |           |
|                                                                                                                                                                                                                         |   | Increase/       |   |   |   | Obligation    |           |   |   | Cost*         |           |
| Actuarial Assumptions                                                                                                                                                                                                        |   | (Decrease)      |   |   |   | (Thousands)   |           |   |   | (Thousands)   |           |
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |   |
| Discount Rate                                                                                                                                                                                                                |   | 0.25            | %      |   |   | $             | (9,820         | )      |   | $             | 199            |   |
|                                                                                                                                                                                                                         |   | (0.25           | )      |   |   |          | 10,120         |   |   |          | (220           | ) |
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |   |
| Rate of Future Compensation Increase                                                                                                                                                                                         |   | 0.25            | %      |   |   |          | 6,400          |   |   |          | 380            |   |
|                                                                                                                                                                                                                         |   | (0.25           | )      |   |   |          | (6,300         | )      |   |          | (370           | ) |
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |   |
| Expected Return on Plan Assets                                                                                                                                                                                               |   | 0.25            | %      |   |   |          | —        |   |   |          | (610           | ) |
|                                                                                                                                                                                                                         |   | (0.25           | )      |   |   |          | —        |   |   |          | 610            |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |   |
| Postretirement Benefits:                                                                                                                                                                                                     |   |            |   |   |   |          |           |   |   |          |           |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          | Estimated      |   |   |          | Estimated      |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          | Increase/      |   |   |          | Increase/      |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          | (Decrease) to  |   |   |          | (Decrease) to  |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          | Projected      |   |   |          | Annual Net     |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          | Postretirement |   |   |          | Postretirement |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          | Benefit        |   |   |          | Benefit        |   |
|                                                                                                                                                                                                                         |   | Increase/  |   |   |   |          | Obligation     |   |   |          | Cost*          |   |
| Actuarial Assumptions                                                                                                                                                                                                        |   | (Decrease)      |   |   |   |          | (Thousands)    |   |   |          | (Thousands)    |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |   |
| Discount Rate                                                                                                                                                                                                                |   | 0.25            | %      |   |   | $             | (2,320         | )      |   | $             | (116           | ) |
|                                                                                                                                                                                                                         |   | (0.25           | )      |   |   |          | 2,380          |   |   |          | 114            |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |   |
| Expected Return on Plan Assets                                                                                                                                                                                               |   | 0.25            | %      |   |   |          | —        |   |   |          | (100           | ) |
|                                                                                                                                                                                                                         |   | (0.25           | )      |   |   |          | —        |   |   |          | 100            |   |
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |   |
| Annual Medical Cost Trend                                                                                                                                                                                                    |   | 1.00            | %      |   |   |          | 5,850          |   |   |          | 1,270          |   |
|                                                                                                                                                                                                                         |   | (1.00           | )      |   |   |          | (5,300         | )      |   |          | (1,130         | ) |
|                                                                                                                                                                                                                         |   |            |   |   |   |          |           |   |   |          |           |   |
| * Excludes the impact of regulatory deferral mechanism. See Note 2, Pension Plans and Other Postretirement Benefits, of the Notes to Financial Statements for information regarding the regulatory treatment of these costs. |

|   | The Utility’s PGA Clause allows Laclede Gas to flow through to customers, subject to prudence review, the cost of purchased gas supplies, including the costs, cost reductions, and related carrying costs associated with the Utility’s use of natural gas derivative instruments to hedge the purchase price of natural gas. The difference between actual costs incurred and costs recovered through the application of the PGA are recorded as regulatory assets and regulatory liabilities that are recovered or refunded in a subsequent period. The PGA Clause also authorizes the Utility to recover costs it incurs to finance its investment in gas supplies that are purchased during the storage injection season for sale during the heating season. The PGA Clause also permits the application of carrying costs to all over- or under-recoveries of gas costs, including costs and cost reductions associated with the use of derivative instruments. The PGA Clause also provides for a portion of income from off-system sales and capacity release revenues to be flowed through to customers. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Laclede Gas records deferred tax liabilities and assets measured by enacted tax rates for the net tax effect of all temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes, and the amounts used for income tax purposes. Changes in enacted tax rates, if any, and certain property basis differences will be reflected by entries to regulatory asset or regulatory liability accounts for regulated activities. Pursuant to the direction of the MoPSC, Laclede Gas’ provision for income tax expense for financial reporting purposes reflects an open-ended method of tax depreciation. Laclede Gas’ provision for income tax expense also records the income tax effect associated with the difference between overheads capitalized to construction for financial reporting purposes and those recognized for tax purposes without recording an offsetting deferred income tax expense. These two methods are consistent with the regulatory treatment prescribed by the MoPSC.                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Asset retirement obligations are recorded in accordance with GAAP using various assumptions related to the timing, method of settlement, inflation, and profit margins that third parties would demand to settle the future obligations. These assumptions require the use of judgment and estimates and may change in future periods as circumstances dictate. As authorized by the MoPSC, Laclede Gas accrues future removal costs associated with its property, plant and equipment through its depreciation rates, even if a legal obligation does not exist as defined by GAAP. The difference between removal costs recognized in depreciation rates and the accretion expense and depreciation expense recognizable pursuant to GAAP is a timing difference between the recovery of these costs in rates and their recognition for financial reporting purposes. Accordingly, these differences are deferred as regulatory liabilities.                                                                                                                                                                                |

|   | The amount of net periodic pension and other postretirement benefit cost recognized in the financial statements related to the Utility’s qualified pension plans and other postretirement benefit plans is based upon allowances, as approved by the MoPSC, which have been established in the rate-making process for the recovery of these costs from customers. The differences between these amounts and actual pension and other postretirement benefit costs incurred for financial reporting purposes are deferred as regulatory assets or regulatory liabilities. GAAP also requires that changes that affect the funded status of pension and other postretirement benefit plans, but that are not yet required to be recognized as components of pension and other postretirement benefit cost, be reflected in other comprehensive income. For the Utility’s qualified pension plans and other postretirement benefit plans, amounts that would otherwise be reflected in other comprehensive income are deferred with entries to regulatory assets or regulatory liabilities. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Note 1

REGULATORY AND OTHER MATTERS

New Accounting Standards

LIQUIDITY AND CAPITAL RESOURCES

| Type of Facility                 | S&P | Moody’s | Fitch |
|----------------------------------|---------|---------------|-------|
| Laclede Gas Issuer Rating        | A       |          | A-    |
| Laclede Gas First Mortgage Bonds | A       | A2            | A+    |
| Laclede Gas Commercial Paper     | A-1     | P-2           | F1    |

|                                         |   | Payments due by period |    |
|----------------------------------------------|--------|------------------------|---------|
|                                         |   |                   |    | Less than |   | 1-3 |   | 3-5 |   | More than |   |
| Contractual Obligations                      |   | Total                  |    | 1 Year |   | Years |   | Years |   | 5 Years |   |
| Principal Payments on Long-Term Debt         |   | $                      | 390.0   |   | $ | 25.0 |   | $ | 25.0 |   | $ | — |   | $ | 340.0 |   |
| Interest Payments on Long-Term Debt          |   |                   | 484.9   |   |   | 23.8 |   |   | 45.1 |   |   | 42.7 |   |   | 373.3 |   |
| Operating Leases (a)                         |   |                   | 15.0    |   |   | 5.1 |   |   | 6.9 |   |   | 3.0 |   |   | — |   |
| Purchase Obligations – Natural Gas (b) |   |                   | 410.1   |   |   | 259.2 |   |   | 116.8 |   |   | 19.7 |   |   | 14.4 |   |
| Purchase Obligations – Other (c)       |   |                   | 89.1    |   |   | 17.4 |   |   | 18.2 |   |   | 16.6 |   |   | 36.9 |   |
| Total (d)                                    |   | $                      | 1,389.1 |   | $ | 330.5 |   | $ | 212.0 |   | $ | 82.0 |   | $ | 764.6 |   |

| (a) | Operating lease obligations are primarily for office space, vehicles, and power operated equipment. Additional payments will be incurred if renewal options are exercised under the provisions of certain agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | These purchase obligations represent the minimum payments required under existing natural gas transportation and storage contracts and natural gas supply agreements. These amounts reflect fixed obligations as well as obligations to purchase natural gas at future market prices, calculated using September 30, 2010 New York Mercantile Exchange futures prices. Laclede Gas recovers the costs related to its purchases, transportation, and storage of natural gas through the operation of its PGA Clause, subject to prudence review by the MoPSC; however, variations in the timing of collections of gas costs from customers affect short-term cash requirements. Additional contractual commitments are generally entered into prior to or during the heating season.                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (c) | These purchase obligations reflect miscellaneous agreements for the purchase of materials and the procurement of services necessary for normal operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (d) | The categories of Capital Leases and Other Long-Term Liabilities have been excluded from the table above because there are no material amounts of contractual obligations under these categories. Long-term liabilities associated with unrecognized tax benefits, totaling $6.4 million, have been excluded from the table above because the timing of future cash outflows, if any, cannot be reasonably estimated. Also, commitments related to pension and postretirement benefit plans have been excluded from the table above. Laclede Gas expects to make contributions to its qualified, trusteed pension plans totaling $10.6 million in fiscal year 2011. Laclede Gas anticipates a $2.4 million contribution relative to its non-qualified pension plans during fiscal year 2011. With regard to the postretirement benefits, the Utility anticipates it will contribute $13.3 million to the qualified trusts and $0.3 million directly to participants from Laclede Gas’ funds during fiscal year 2011. For further discussion of the Utility’s pension and postretirement benefit plans, refer to Note 2, Pension Plans and Other Postretirement Benefits, of the Notes to Financial Statements. |

Note 8

Note 12

| LACLEDE GAS COMPANY                                                                          |   |   |   |   |    |   |   |   |   |      |         |   |   |
|----------------------------------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|--------|--------|--------|-----------|--------------|--------|--------|
| STATEMENTS OF INCOME                                                                         |   |   |   |   |    |   |   |   |   |      |         |   |   |
|                                                                                         |   |   |   |   |    |   |   |   |   |      |         |   |   |
| (Thousands)                                                                                  |   |   |   |   |    |   |   |   |   |      |         |   |   |
| Years Ended September 30                                                                     |   |   |   | 2010   |    |   |   | 2009   |   |      |    | 2008   |   |
|                                                                                         |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |
| Operating Revenues:                                                                          |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |
|   Utility                                                                          |   |   |   | $      | 864,297 |   |   |   | $      | 1,053,993 |         |   |   | $ | 1,128,287 |   |
|   Other                                                                            |   |   |   |   | 10,327  |   |   |   |   | 2,246     |         |   |   |   | 2,693 |   |
|           Total Operating Revenues         |   |   |   |   | 874,624 |   |   |   |   | 1,056,239 |         |   |   |   | 1,130,980 |   |
|                                                                                         |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |
| Operating Expenses:                                                                          |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |
|   Utility                                                                          |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |
|     Natural and propane gas                                              |   |   |   |   | 519,905 |   |   |   |   | 699,984   |         |   |   |   | 770,097 |   |
|     Other operation expenses                                             |   |   |   |   | 141,995 |   |   |   |   | 146,542   |         |   |   |   | 144,611 |   |
|     Maintenance                                                          |   |   |   |   | 27,244  |   |   |   |   | 27,818    |         |   |   |   | 25,827 |   |
|     Depreciation and amortization                                        |   |   |   |   | 37,572  |   |   |   |   | 36,751    |         |   |   |   | 35,303 |   |
|     Taxes, other than income taxes                                       |   |   |   |   | 61,407  |   |   |   |   | 68,639    |         |   |   |   | 69,023 |   |
|           Total Utility Operating Expenses |   |   |   |   | 788,123 |   |   |   |   | 979,734   |         |   |   |   | 1,044,861 |   |
|     Other                                                                |   |   |   |   | 4,343   |   |   |   |   | 2,238     |         |   |   |   | 2,641 |   |
|           Total Operating Expenses         |   |   |   |   | 792,466 |   |   |   |   | 981,972   |         |   |   |   | 1,047,502 |   |
| Operating Income                                                                             |   |   |   |   | 82,158  |   |   |   |   | 74,267    |         |   |   |   | 83,478 |   |
| Other Income and (Income Deductions) - Net                                                   |   |   |   |   | 2,569   |   |   |   |   | 3,128     |         |   |   |   | 1,206 |   |
| Interest Charges:                                                                            |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |
|   Interest on long-term debt                                                       |   |   |   |   | 24,583  |   |   |   |   | 24,583    |         |   |   |   | 19,851 |   |
|   Other interest charges                                                           |   |   |   |   | 2,269   |   |   |   |   | 5,770     |         |   |   |   | 10,363 |   |
|           Total Interest Charges           |   |   |   |   | 26,852  |   |   |   |   | 30,353    |         |   |   |   | 30,214 |   |
| Income Before Income Taxes                                                                   |   |   |   |   | 57,875  |   |   |   |   | 47,042    |         |   |   |   | 54,470 |   |
| Income Tax Expense                                                                           |   |   |   |   | 18,150  |   |   |   |   | 13,859    |         |   |   |   | 15,264 |   |
| Net Income                                                                                   |   |   |   |   | 39,725  |   |   |   |   | 33,183    |         |   |   |   | 39,206 |   |
| Dividends on Redeemable Preferred Stock                                                      |   |   |   |   | — |   |   |   |   | 15        |         |   |   |   | 35 |   |
| Earnings Applicable to Common Stock                                                          |   |   |   | $      | 39,725  |   |   |   | $      | 33,168    |         |   |   | $ | 39,171 |   |
|                                                                                         |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |
|                                                                                         |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |
|                                                                                         |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |
| See the accompanying Notes to Financial Statements.                                          |   |   |   |   |    |   |   |   |   |      |         |   |   |   |   |   |

| LACLEDE GAS COMPANY                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| STATEMENTS OF COMPREHENSIVE INCOME                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Thousands)                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Years Ended September 30                                                                                                                                         |   |   |   | 2010   |   |   |   | 2009   |   |   |   | 2008   |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                                                                                                                                       |   |   |   | $      | 39,725 |   |   |   | $      | 33,183 |   |   |   | $ | 39,206 |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Comprehensive Income (Loss) Before Tax:                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net gains (losses) on cash flow hedging derivative instruments:                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net hedging gains arising during the period                                                                                              |   |   |   |   | 160    |   |   |   |   | 248    |   |   |   |   | — |   |
|     Reclassification adjustment for gains included in net income                                                                             |   |   |   |   | (264   | )      |   |   |   | (119   | )      |   |   |   | — |   |
|         Net unrealized (losses) gains on cash flow hedging derivative                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           instruments                                                                                               |   |   |   |   | (104   | )      |   |   |   | 129    |   |   |   |   | — |   |
|   Defined benefit pension and other postretirement benefit plans:                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net actuarial loss arising during the period                                                                                             |   |   |   |   | (1,783 | )      |   |   |   | (1,728 | )      |   |   |   | (271 | ) |
|     Amortization of actuarial loss included in net periodic pension      and other postretirement benefit cost |   |   |   |   | 1,471  |   |   |   |   | 199    |   |   |   |   | 171 |   |
|         Net defined benefit pension and other postretirement benefit plans                                               |   |   |   |   | (312   | )      |   |   |   | (1,529 | )      |   |   |   | (100 | ) |
|   Other Comprehensive Loss, Before Tax                                                                                                                 |   |   |   |   | (416   | )      |   |   |   | (1,400 | )      |   |   |   | (100 | ) |
|   Income Tax Benefit Related to Items of Other Comprehensive Loss                                                                                      |   |   |   |   | (160   | )      |   |   |   | (540   | )      |   |   |   | (37 | ) |
| Other Comprehensive Loss, Net of Tax                                                                                                                             |   |   |   |   | (256   | )      |   |   |   | (860   | )      |   |   |   | (63 | ) |
| Comprehensive Income                                                                                                                                             |   |   |   | $      | 39,469 |   |   |   | $      | 32,323 |   |   |   | $ | 39,143 |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See the accompanying Notes to Financial Statements.                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| LACLEDE GAS COMPANY                                                                |   |   |   |   |      |   |   |   |   |
|------------------------------------------------------------------------------------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
| BALANCE SHEETS                                                                     |   |   |   |   |      |   |   |   |   |
|                                                                               |   |   |   |   |      |   |   |   |   |
| (Thousands)                                                                        |   |   |   |   |      |   |   |   |   |
| September 30                                                                       |   |   |   | 2010   |      |   |   | 2009   |   |
|                                                                               |   |   |   |   |      |   |   |   |   |   |   |
| ASSETS                                                                             |   |   |   |   |      |   |   |   |   |   |   |
| Utility Plant                                                                      |   |   |   | $      | 1,326,284 |   |   |   | $      | 1,280,238 |   |
|   Less – Accumulated depreciation and amortization                 |   |   |   |   | 442,200   |   |   |   |   | 424,309 |   |
|           Net Utility Plant      |   |   |   |   | 884,084   |   |   |   |   | 855,929 |   |
| Other Property and Investments                                                     |   |   |   |   | 45,864    |   |   |   |   | 40,549 |   |
|                                                                               |   |   |   |   |      |   |   |   |   |   |   |
| Current Assets:                                                                    |   |   |   |   |      |   |   |   |   |   |   |
|   Cash and cash equivalents                                              |   |   |   |   | 1,009     |   |   |   |   | 1,402 |   |
|   Accounts receivable:                                                   |   |   |   |   |      |   |   |   |   |   |   |
|     Utility                                                    |   |   |   |   | 70,053    |   |   |   |   | 81,262 |   |
|     Non-utility                                                |   |   |   |   | 848       |   |   |   |   | 1,634 |   |
|     Associated companies                                       |   |   |   |   | 310       |   |   |   |   | 375 |   |
|     Other                                                      |   |   |   |   | 7,277     |   |   |   |   | 4,731 |   |
|     Allowance for doubtful accounts                            |   |   |   |   | (10,176   | )      |   |   |   | (10,791 | ) |
|   Inventories:                                                           |   |   |   |   |      |   |   |   |   |   |   |
|     Natural gas stored underground at LIFO cost                |   |   |   |   | 113,576   |   |   |   |   | 93,313 |   |
|     Propane gas at FIFO cost                                   |   |   |   |   | 15,625    |   |   |   |   | 19,847 |   |
|     Materials, supplies and merchandise at average cost        |   |   |   |   | 3,741     |   |   |   |   | 4,032 |   |
|   Derivative instrument assets                                           |   |   |   |   | 9,288     |   |   |   |   | 12,369 |   |
|   Unamortized purchased gas adjustments                                  |   |   |   |   | 23,718    |   |   |   |   | — |   |
|   Prepayments and other                                                  |   |   |   |   | 7,101     |   |   |   |   | 7,547 |   |
|           Total Current Assets   |   |   |   |   | 242,370   |   |   |   |   | 215,721 |   |
|                                                                               |   |   |   |   |      |   |   |   |   |   |   |
| Deferred Charges:                                                                  |   |   |   |   |      |   |   |   |   |   |   |
|   Regulatory assets                                                      |   |   |   |   | 479,462   |   |   |   |   | 482,999 |   |
|   Other                                                                  |   |   |   |   | 6,672     |   |   |   |   | 5,089 |   |
|           Total Deferred Charges |   |   |   |   | 486,134   |   |   |   |   | 488,088 |   |
|                                                                               |   |   |   |   |      |   |   |   |   |   |   |
| Total Assets                                                                       |   |   |   | $      | 1,658,452 |   |   |   | $      | 1,600,287 |   |

| LACLEDE GAS COMPANY                                                                                      |   |   |   |   |      |   |   |   |   |
|----------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
| BALANCE SHEETS (continued)                                                                               |   |   |   |   |      |   |   |   |   |
|                                                                                                     |   |   |   |   |      |   |   |   |   |
| (Thousands)                                                                                              |   |   |   |   |      |   |   |   |   |
| September 30                                                                                             |   |   |   | 2010   |      |   |   | 2009   |   |
|                                                                                                     |   |   |   |   |      |   |   |   |   |   |   |
| CAPITALIZATION AND LIABILITIES                                                                           |   |   |   |   |      |   |   |   |   |   |   |
| Capitalization:                                                                                          |   |   |   |   |      |   |   |   |   |   |   |
|   Common stock equity                                                                          |   |   |   | $      | 411,259   |   |   |   | $      | 402,585 |   |
|    Long-term debt                                                                         |   |   |   |   | 364,298   |   |   |   |   | 389,240 |   |
|           Total Capitalization                         |   |   |   |   | 775,557   |   |   |   |   | 791,825 |   |
|                                                                                                     |   |   |   |   |      |   |   |   |   |   |   |
| Current Liabilities:                                                                                     |   |   |   |   |      |   |   |   |   |   |   |
|   Notes payable                                                                                |   |   |   |   | 129,650   |   |   |   |   | 129,800 |   |
|   Accounts payable                                                                             |   |   |   |   | 36,706    |   |   |   |   | 30,220 |   |
|   Accounts payable – associated companies                                                |   |   |   |   | 652       |   |   |   |   | — |   |
|   Advance customer billings                                                                    |   |   |   |   | 16,809    |   |   |   |   | 21,140 |   |
|   Current portion of long-term debt                                                            |   |   |   |   | 25,000    |   |   |   |   | — |   |
|   Wages and compensation accrued                                                               |   |   |   |   | 13,410    |   |   |   |   | 12,682 |   |
|   Dividends payable                                                                            |   |   |   |   | 8,806     |   |   |   |   | 8,535 |   |
|   Customer deposits                                                                            |   |   |   |   | 11,244    |   |   |   |   | 12,400 |   |
|   Interest accrued                                                                             |   |   |   |   | 9,639     |   |   |   |   | 9,943 |   |
|   Taxes accrued                                                                                |   |   |   |   | 8,677     |   |   |   |   | 12,414 |   |
|   Unamortized purchased gas adjustments                                                        |   |   |   |   | —   |   |   |   |   | 3,130 |   |
|   Deferred income taxes                                                                        |   |   |   |   | 4,248     |   |   |   |   | 912 |   |
|   Other                                                                                        |   |   |   |   | 11,385    |   |   |   |   | 10,737 |   |
|           Total Current Liabilities                    |   |   |   |   | 276,226   |   |   |   |   | 251,913 |   |
|                                                                                                     |   |   |   |   |      |   |   |   |   |   |   |
| Deferred Credits and Other Liabilities:                                                                  |   |   |   |   |      |   |   |   |   |   |   |
|   Deferred income taxes                                                                        |   |   |   |   | 292,766   |   |   |   |   | 256,381 |   |
|   Unamortized investment tax credits                                                           |   |   |   |   | 3,538     |   |   |   |   | 3,754 |   |
|   Pension and postretirement benefit costs                                                     |   |   |   |   | 207,607   |   |   |   |   | 202,681 |   |
|   Asset retirement obligations                                                                 |   |   |   |   | 25,829    |   |   |   |   | 25,495 |   |
|   Regulatory liabilities                                                                       |   |   |   |   | 47,365    |   |   |   |   | 44,225 |   |
|   Other                                                                                        |   |   |   |   | 29,564    |   |   |   |   | 24,013 |   |
|           Total Deferred Credits and Other Liabilities |   |   |   |   | 606,669   |   |   |   |   | 556,549 |   |
| Commitments and Contingencies (Note 12)                                                                  |   |   |   |   |      |   |   |   |   |   |   |
| Total Capitalization and Liabilities                                                                     |   |   |   | $      | 1,658,452 |   |   |   | $      | 1,600,287 |   |
|                                                                                                     |   |   |   |   |      |   |   |   |   |   |   |
|                                                                                                     |   |   |   |   |      |   |   |   |   |   |   |
|                                                                                                     |   |   |   |   |      |   |   |   |   |   |   |
| See the accompanying Notes to Financial Statements.                                                      |   |   |   |   |      |   |   |   |   |   |   |

| LACLEDE GAS COMPANY                                                                   |   |   |   |    |   |   |   |    |   |
|---------------------------------------------------------------------------------------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
| STATEMENTS OF CAPITALIZATION                                                          |   |   |   |    |   |   |   |    |   |
|                                                                                  |   |   |   |    |   |   |   |    |   |
| (Thousands, Except for Shares and Per Share Amounts)                                  |   |   |   |    |   |   |   |    |   |
| September 30                                                                          |   |   |   | 2010    |   |   |   | 2009    |   |
|                                                                                  |   |   |   |    |   |   |   |    |   |
| Common Stock Equity:                                                                  |   |   |   |    |   |   |   |    |   |
|   Common stock, par value $1 per share and Paid-in Capital:                 |   |   |   |    |   |   |   |    |   |
|     Authorized – 2010 and 2009, 50,000,000 shares           |   |   |   |    |   |   |   |    |   |
|     Issued – 2010, 11,674 shares; and 2009, 11,634 shares   |   |   | $      | 208,154 |   |   | $      | 203,754 |   |
|   Retained earnings                                                         |   |   |   | 205,980 |   |   |   | 201,450 |   |
|   Accumulated other comprehensive loss                                      |   |   |   | (2,875  | )      |   |   | (2,619  | )      |
|           Total Common Stock Equity |   |   |   | 411,259 |   |   |   | 402,585 |   |
|                                                                                  |   |   |   |    |   |   |   |    |   |
| Long-Term Debt:                                                                       |   |   |   |    |   |   |   |    |   |
|   First Mortgage Bonds:                                                     |   |   |   |    |   |   |   |    |   |
|     6-1/2% Series, due November 15, 2010                          |   |   |   | — |   |   |   | 25,000  |   |
|     6-1/2% Series, due October 15, 2012                           |   |   |   | 25,000  |   |   |   | 25,000  |   |
|     5-1/2% Series, due May 1, 2019                                |   |   |   | 50,000  |   |   |   | 50,000  |   |
|     7% Series, due June 1, 2029                                   |   |   |   | 25,000  |   |   |   | 25,000  |   |
|     7.90% Series, due September 15, 2030                          |   |   |   | 30,000  |   |   |   | 30,000  |   |
|     6% Series, due May 1, 2034                                    |   |   |   | 100,000 |   |   |   | 100,000 |   |
|     6.15% Series, due June 1, 2036                                |   |   |   | 55,000  |   |   |   | 55,000  |   |
|     6.35% Series, due October 15, 2038                            |   |   |   | 80,000  |   |   |   | 80,000  |   |
|           Total                     |   |   |   | 365,000 |   |   |   | 390,000 |   |
|   Unamortized discount, net of premium, on long-term debt                   |   |   |   | (702    | )      |   |   | (760    | )      |
|           Total Long-Term Debt      |   |   |   | 364,298 |   |   |   | 389,240 |   |
|           Total Capitalization      |   |   | $      | 775,557 |   |   | $      | 791,825 |   |
|                                                                                  |   |   |   |    |   |   |   |    |   |
|                                                                                  |   |   |   |    |   |   |   |    |   |
|                                                                                  |   |   |   |    |   |   |   |    |   |
| Long-term debt dollar amounts are exclusive of current portion.                       |   |   |   |    |   |
|                                                                                  |   |   |   |    |   |   |   |    |   |
| See the accompanying Notes to Financial Statements.                                   |   |   |   |    |   |   |   |    |   |

| LACLEDE GAS COMPANY                                                                                        |   |                |   |    |    |     |   |             |   |   |    |
|------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|---------|---------|----------|--------|------------------|--------|--------|---------|
| STATEMENTS OF COMMON SHAREHOLDER’S EQUITY                                                            |   |                |   |    |    |     |   |
|                                                                                                       |   |                |   |    |    |     |   |             |   |   |    |
|                                                                                                       |   | Common Stock Issued |   | Paid-in |    | Retained |   | Accum.OtherComp. |   |   |    |
| (Thousands, Except for Shares)                                                                             |   | Shares              |   | Amount  |    | Capital  |   | Earnings         |   | Income |    | Total |   |
|                                                                                                       |   |                |   |    |    |     |   |             |   |   |    |   |   |   |   |   |   |   |
| BALANCE OCTOBER 1, 2007                                                                                    |   | 10,307              |   | $       | 10      |     | $      | 151,500          |   | $      | 195,728 |   | $ | (1,727 | ) | $ | 345,511 |   |
|   Adoption of FIN 48, as codified in    ASC Topic 740, as of October 1, 2007 |   | —             |   |    | — |     |   | —          |   |   | 447     |   |   | — |   |   | 447 |   |
|   Net income                                                                                     |   | —             |   |    | — |     |   | —          |   |   | 39,206  |   |   | — |   |   | 39,206 |   |
|   Dividends declared:                                                                            |   |                |   |    |    |     |   |             |   |   |    |   |   |   |   |   |   |   |
|     Common stock                                                                       |   | —             |   |    | — |     |   | —          |   |   | (32,811 | ) |   | — |   |   | (32,811 | ) |
|     Preferred stock                                                                    |   | —             |   |    | — |     |   | —          |   |   | (35     | ) |   | — |   |   | (35 | ) |
|   Stock-based compensation costs                                                                 |   | —             |   |    | — |     |   | 2,036            |   |   | — |   |   | — |   |   | 2,036 |   |
|   Tax benefit – stock compensation                                                         |   | —             |   |    | — |     |   | 534              |   |   | — |   |   | — |   |   | 534 |   |
|   Other comprehensive loss, net of tax                                                           |   | —             |   |    | — |     |   | —          |   |   | — |   |   | (63 | ) |   | (63 | ) |
|   Issuance of common stock to Laclede Group                                                      |   | 109                 |   |    | — |     |   | 3,803            |   |   | — |   |   | — |   |   | 3,803 |   |
| BALANCE SEPTEMBER 30, 2008                                                                                 |   | 10,416              |   |    | 10      |     |   | 157,873          |   |   | 202,535 |   |   |  (1,790 | ) |   | 358,628 |   |
|   Net income                                                                                     |   | —             |   |    | — |     |   | —          |   |   | 33,183  |   |   | — |   |   | 33,183 |   |
|   Dividends declared:                                                                            |   |                |   |    |    |     |   |             |   |   |    |   |   |   |   |   |   |   |
|     Common stock                                                                       |   | —             |   |    | — |     |   | —          |   |   | (34,108 | ) |   | — |   |   | (34,108 | ) |
|     Preferred stock                                                                    |   | —             |   |    | — |     |   | —          |   |   | (15     | ) |   | — |   |   | (15 | ) |
|   Stock-based compensation costs                                                                 |   | —             |   |    | — |     |   | 3,228            |   |   | — |   |   | — |   |   | 3,228 |   |
|   Tax benefit – stock compensation                                                         |   | —             |   |    | — |     |   | 663              |   |   | — |   |   | — |   |   | 663 |   |
|   Other comprehensive loss, net of tax                                                           |   | —             |   |    | — |     |   | —          |   |   | — |   |   | (860 | ) |   | (860 | ) |
|   Issuance of common stock to Laclede Group                                                      |   | 1,218               |   |    | 2       |     |   | 41,978           |   |   | — |   |   | — |   |   | 41,980 |   |
|   Adoption of SFAS No. 158, as codified in    ASC Topic 715, net of tax      |   | —             |   |    | — |     |   | —          |   |   | (145    | ) |   | 31 |   |   | (114 | ) |
| BALANCE SEPTEMBER 30, 2009                                                                                 |   | 11,634              |   |    | 12      |     |   | 203,742          |   |   | 201,450 |   |   | (2,619 | ) |   | 402,585 |   |
|   Net income                                                                                     |   | —             |   |    | — |     |   | —          |   |   | 39,725  |   |   | — |   |   | 39,725 |   |
|   Dividends declared:                                                                            |   |                |   |    |    |     |   |             |   |   |    |   |   |   |   |   |   |   |
|     Common stock                                                                       |   | —             |   |    | — |     |   | —          |   |   | (35,195 | ) |   | — |   |   | (35,195 | ) |
|   Stock-based compensation costs                                                                 |   | —             |   |    | — |     |   | 2,956            |   |   | — |   |   | — |   |   | 2,956 |   |
|   Tax benefit – stock compensation                                                         |   | —             |   |    | — |     |   | 6                |   |   | — |   |   | — |   |   | 6 |   |
|   Other comprehensive loss, net of tax                                                           |   | —             |   |    | — |     |   | —          |   |   | — |   |   | (256 | ) |   | (256 | ) |
|   Issuance of common stock to Laclede Group                                                      |   | 40                  |   |    | — |     |   | 1,438            |   |   | — |   |   | — |   |   | 1,438 |   |
| BALANCE SEPTEMBER 30, 2010                                                                                 |   | 11,674              |   | $       | 12      |     | $      | 208,142          |   | $      | 205,980 |   | $ | (2,875 | ) | $ | 411,259 |   |
|                                                                                                       |   |                |   |    |    |     |   |             |   |   |    |   |   |   |   |   |   |   |
|                                                                                                       |   |                |   |    |    |     |   |             |   |   |    |   |   |   |   |   |   |   |
|                                                                                                       |   |                |   |    |    |     |   |             |   |   |    |   |   |   |   |   |   |   |
| See the accompanying Notes to Financial Statements.                                                        |   |                |   |    |    |     |   |             |   |   |    |   |   |

| LACLEDE GAS COMPANY                                                                                                                        |   |   |    |   |   |     |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|----------|--------|
| STATEMENTS OF CASH FLOWS                                                                                                                   |   |   |    |   |   |     |   |
|                                                                                                                                       |   |   |    |   |   |     |   |
| (Thousands)                                                                                                                                |   |   |    |   |   |     |   |
| Years Ended September 30                                                                                                                   |   | 2010   |    | 2009   |   | 2008     |   |
|                                                                                                                                       |   |   |    |   |   |     |   |   |   |   |
| Operating Activities:                                                                                                                      |   |   |    |   |   |     |   |   |   |   |
|   Net Income                                                                                                                     |   | $      | 39,725  |   | $      | 33,183   |   | $ | 39,206 |   |
|   Adjustments to reconcile net income to net cash provided by      (used in) operating activities: |   |   |    |   |   |     |   |   |   |   |
|     Depreciation and amortization                                                                                      |   |   | 37,572  |   |   | 36,751   |   |   | 35,303 |   |
|     Deferred income taxes and investment tax credits                                                                   |   |   | 31,454  |   |   | 21,404   |   |   | 6,635 |   |
|     Other – net                                                                                                  |   |   | 1,812   |   |   | 1,557    |   |   | 3,553 |   |
|     Changes in assets and liabilities:                                                                                 |   |   |    |   |   |     |   |   |   |   |
|       Accounts receivable – net                                                                        |   |   | 8,899   |   |   | 18,502   |   |   | 4,776 |   |
|       Unamortized purchased gas adjustments                                                                  |   |   | (26,848 | )      |   | 36,541   |   |   | (20,598 | ) |
|       Deferred purchased gas costs                                                                           |   |   | 20,265  |   |   | (45,234  | )      |   | (19,614 | ) |
|       Accounts payable                                                                                       |   |   | 6,764   |   |   | (27,631  | )      |   | 8,024 |   |
|       Advance customer billings – net                                                                  |   |   | (4,331  | )      |   | (4,408   | )      |   | 108 |   |
|       Taxes accrued                                                                                          |   |   | (3,860  | )      |   | 1,938    |   |   | (6,126 | ) |
|       Natural gas stored underground                                                                         |   |   | (20,263 | )      |   | 102,795  |   |   | (67,996 | ) |
|       Other assets and liabilities                                                                           |   |   | 1,391   |   |   | 41,044   |   |   | (28,860 | ) |
|           Net cash provided by (used in) operating activities                            |   |   | 92,580  |   |   | 216,442  |   |   | (45,589 | ) |
|                                                                                                                                       |   |   |    |   |   |     |   |   |   |   |
| Investing Activities:                                                                                                                      |   |   |    |   |   |     |   |   |   |   |
|   Capital expenditures                                                                                                           |   |   | (56,234 | )      |   | (51,384  | )      |   | (55,304 | ) |
|   Other investments                                                                                                              |   |   | (3,535  | )      |   | (261     | )      |   | (1,119 | ) |
|           Net cash used in investing activities                                          |   |   | (59,769 | )      |   | (51,645  | )      |   | (56,423 | ) |
|                                                                                                                                       |   |   |    |   |   |     |   |   |   |   |
| Financing Activities:                                                                                                                      |   |   |    |   |   |     |   |   |   |   |
|   Issuance of first mortgage bonds                                                                                               |   |   | — |   |   | —  |   |   | 80,000 |   |
|   Maturity of first mortgage bonds                                                                                               |   |   | — |   |   | —  |   |   | (40,000 | ) |
|   (Repayment) issuance of short-term debt - net                                                                                  |   |   | (150    | )      |   | (175,316 | )      |   | 93,716 |   |
|   Changes in book overdrafts                                                                                                     |   |   | 358     |   |   | 652      |   |   | — |   |
|   Dividends paid                                                                                                                 |   |   | (34,925 | )      |   | (33,837  | )      |   | (32,497 | ) |
|   Issuance of common stock to Laclede Group                                                                                      |   |   | 1,438   |   |   | 41,980   |   |   | 3,803 |   |
|   Excess tax benefits from stock-based compensation                                                                              |   |   | 131     |   |   | 706      |   |   | 387 |   |
|   Preferred stock redeemed/reacquired                                                                                            |   |   | — |   |   | (627     | )      |   | (160 | ) |
|   Other                                                                                                                          |   |   | (56     | )      |   | (116     | )      |   | (2,528 | ) |
|           Net cash (used in) provided by financing activities                            |   |   | (33,204 | )      |   | (166,558 | )      |   | 102,721 |   |
|                                                                                                                                       |   |   |    |   |   |     |   |   |   |   |
| Net (Decrease) Increase in Cash and Cash Equivalents                                                                                       |   |   | (393    | )      |   | (1,761   | )      |   | 709 |   |
| Cash and Cash Equivalents at Beginning of Year                                                                                             |   |   | 1,402   |   |   | 3,163    |   |   | 2,454 |   |
| Cash and Cash Equivalents at End of Year                                                                                                   |   | $      | 1,009   |   | $      | 1,402    |   | $ | 3,163 |   |
|                                                                                                                                       |   |   |    |   |   |     |   |   |   |   |
|                                                                                                                                       |   |   |    |   |   |     |   |   |   |   |
| Supplemental Disclosure of Cash Paid (Refunded) During the Year for:                                                                       |   |   |    |   |   |     |   |   |   |   |
|   Interest                                                                                                                       |   | $      | 26,393  |   | $      | 29,873   |   | $ | 30,992 |   |
|   Income taxes                                                                                                                   |   |   | (15,163 | )      |   | (13,088  | )      |   | 21,178 |   |
|                                                                                                                                       |   |   |    |   |   |     |   |   |   |   |
|                                                                                                                                       |   |   |    |   |   |     |   |   |   |   |
|                                                                                                                                       |   |   |    |   |   |     |   |   |   |   |
| See the accompanying Notes to Financial Statements.                                                                                        |   |   |    |   |   |     |   |   |   |   |

NOTES TO FINANCIAL STATEMENTS

| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

|   | (Thousands)                                     |   | 2010   |   | 2009   |   |
|--------|-------------------------------------------------|--------|--------|--------|--------|--------|
|   |                                            |   |   |   |   |   |   |   |
|   | Asset retirement obligations, beginning of year |   | $      | 25,495 |   | $      | 26,817 |   |
|   | Liabilities incurred during the period          |   |   | 208    |   |   | 415 |   |
|   | Liabilities settled during the period           |   |   | (904   | )      |   | (2,767 | ) |
|   | Accretion                                       |   |   | 1,526  |   |   | 1,566 |   |
|   | Revisions in estimated cash flows               |   |   | (496   | )      |   | (536 | ) |
|   | Asset retirement obligations, end of year       |   | $      | 25,829 |   | $      | 25,495 |   |

|   | (Thousands)                                                |   | 2010   |    | 2009   |   |
|--------|------------------------------------------------------------|--------|--------|---------|--------|--------|
|   |                                                       |   |   |    |   |   |   |   |
|   | Regulatory Assets:                                         |   |   |    |   |   |   |   |
|   |   Future income taxes due from customers         |   | $      | 100,624 |   | $      | 91,782 |   |
|   |   Pension and postretirement benefit costs       |   |   | 288,077 |   |   | 280,939 |   |
|   |   Unamortized purchased gas adjustments          |   |   | 23,718  |   |   | — |   |
|   |   Purchased gas costs                            |   |   | 74,040  |   |   | 94,305 |   |
|   |   Compensated absences                           |   |   | 7,885   |   |   | 7,425 |   |
|   |   Cold weather rule                              |   |   | 4,275   |   |   | 5,264 |   |
|   |   Other                                          |   |   | 4,561   |   |   | 3,284 |   |
|   |      Total Regulatory Assets      |   | $      | 503,180 |   | $      | 482,999 |   |
|   | Regulatory Liabilities:                                    |   |   |    |   |   |   |   |
|   |   Unamortized purchased gas adjustments          |   | $      | — |   | $      | 3,130 |   |
|   |   Unamortized investment tax credits             |   |   | 3,538   |   |   | 3,754 |   |
|   |   Accrued cost of removal                        |   |   | 45,441  |   |   | 41,590 |   |
|   |   Other                                          |   |   | 1,924   |   |   | 2,635 |   |
|   |      Total Regulatory Liabilities |   | $      | 50,903  |   | $      | 51,109 |   |

|   | • | The tariffs allow the Utility flexibility to make up to three discretionary PGA changes during each year, in addition to its mandatory November PGA change, so long as such changes are separated by at least two months.                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | The Utility is authorized to recover gas inventory carrying costs through its PGA rates to recover costs it incurs to finance its investment in gas supplies that are purchased during the storage injection season for sale during the heating season. The Utility is also authorized to apply carrying costs to all over- or under-recoveries of gas costs, including costs and cost reductions associated with the use of derivative instruments, including cash payments for margin deposits.                                                                                                                                                                  |
|   | • | The MoPSC approved a plan applicable to the Utility’s gas supply commodity costs under which it retains a portion of cost savings associated with the acquisition of natural gas below an established benchmark level of gas cost. This gas supply cost management program allows the Utility to retain 10% of cost savings, up to a maximum of $3.0 million annually. The Utility recorded $0.6 million in pre-tax income under the plan in fiscal year 2008. Laclede Gas did not record any income under the plan during fiscal years 2009 and 2010. Income recorded under the plan is included in Utility Operating Revenues on the Statements of Income. |

|   | Pre-tax Income               | Customer Share |   | Company Share |
|--------|------------------------------|----------------|--------|---------------|
|   | First $2 million             | 85%            |   | 15%           |
|   | Next $2 million              | 80%            |   | 20%           |
|   | Next $2 million              | 75%            |   | 25%           |
|   | Amounts exceeding $6 million | 70%            |   | 30%           |

Note 2
Note 6
Note 7

|   | (Thousands)                                                   |   | 2010   |   | 2009   |   | 2008   |   |
|--------|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|   |                                                          |   |   |   |   |   |   |   |   |   |   |
|   | Total equity compensation cost                                |   | $      | 3,270  |   | $      | 3,483  |   | $ | 2,263 |   |
|   | Compensation cost capitalized                                 |   |   | (798   | )      |   | (815   | )      |   | (578 | ) |
|   | Compensation cost recognized in net income                    |   |   | 2,472  |   |   | 2,668  |   |   | 1,685 |   |
|   | Income tax benefit recognized in net income                   |   |   | (953   | )      |   | (1,029 | )      |   | (650 | ) |
|   | Compensation cost recognized in net income, net of income tax |   | $      | 1,519  |   | $      | 1,639  |   | $ | 1,035 |   |

NEW ACCOUNTING STANDARDS 

Note 7

Note 2

Note 7

| 2. | PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS |
|----|-------------------------------------------------|

|   | (Thousands)                                            |   | 2010   |    | 2009   |   | 2008    |   |
|--------|--------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
|   |                                                   |   |   |    |   |   |    |   |   |   |   |
|   | Service cost – benefits earned during the period |   | $      | 8,841   |   | $      | 8,936   |   | $ | 12,970 |   |
|   | Interest cost on projected benefit obligation          |   |   | 19,729  |   |   | 20,957  |   |   | 18,680 |   |
|   | Expected return on plan assets                         |   |   | (20,256 | )      |   | (20,938 | )      |   | (20,650 | ) |
|   | Amortization of prior service cost                     |   |   | 756     |   |   | 1,035   |   |   | 1,088 |   |
|   | Amortization of actuarial loss                         |   |   | 8,107   |   |   | 3,096   |   |   | 3,165 |   |
|   | Sub-total                                              |   |   | 17,177  |   |   | 13,086  |   |   | 15,253 |   |
|   | Loss on lump-sum settlement                            |   |   | 1,078   |   |   | — |   |   | — |   |
|   | Regulatory adjustment                                  |   |   | (10,862 | )      |   | (6,890  | )      |   | (9,120 | ) |
|   | Net pension cost                                       |   | $      | 7,393   |   | $      | 6,196   |   | $ | 6,133 |   |

|   | (Thousands)                                    |   | 2010   |   | 2009   |   | 2008    |   |
|--------|------------------------------------------------|--------|--------|--------|--------|--------|---------|--------|
|   |                                           |   |   |   |   |   |    |   |   |   |   |
|   | Current year actuarial loss                    |   | $      | 3,822  |   | $      | 84,187  |   | $ | 18,050 |   |
|   | Amortization of actuarial loss                 |   |   | (9,185 | )      |   | (3,096  | )      |   | (3,165 | ) |
|   | Current year prior service credit              |   |   | (2,949 | )      |   | — |   |   | — |   |
|   | Amortization of prior service cost             |   |   | (756   | )      |   | (1,035  | )      |   | (1,088 | ) |
|   | Sub-total                                      |   |   | (9,068 | )      |   | 80,056  |   |   | 13,797 |   |
|   | Regulatory adjustment                          |   |   | 9,380  |   |   | (78,527 | )      |   | (13,697 | ) |
|   | Total recognized in other comprehensive income |   | $      | 312    |   | $      | 1,529   |   | $ | 100 |   |

|   | (Thousands)                                   |   | 2010   |    | 2009 * |   |
|--------|-----------------------------------------------|--------|--------|---------|--------|--------|
|   |                                          |   |   |    |   |   |   |   |
|   | Benefit obligation at beginning of year       |   | $      | 378,032 |   | $      | 308,736 |   |
|   | Service cost                                  |   |   | 8,841   |   |   | 12,371 |   |
|   | Interest cost                                 |   |   | 19,729  |   |   | 26,150 |   |
|   | Plan amendments                               |   |   | (2,949  | )      |   | — |   |
|   | Actuarial loss                                |   |   | 28,437  |   |   | 54,769 |   |
|   | Settlement loss                               |   |   | 778     |   |   | — |   |
|   | Gross benefits paid **                        |   |   | (34,508 | )      |   | (23,994 | ) |
|   |                                          |   |   |    |   |   |   |   |
|   | Benefit obligation at end of year             |   | $      | 398,360 |   | $      | 378,032 |   |
|   |                                          |   |   |    |   |   |   |   |
|   | Accumulated benefit obligation at end of year |   | $      | 338,042 |   | $      | 305,255 |   |

|   | *      | Due to the change in measurement date, fiscal year 2009 amounts reflect 15 months of activity from July 1, 2008 to September 30, 2009.  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                        |
|   | **     | Includes $(2,293) lump-sum payments recognized as settlements in fiscal year 2010. No lump-sum payments were recognized as settlements in fiscal year 2009. |

|   | (Thousands)                                    |   | 2010   |     | 2009 * |   |
|--------|------------------------------------------------|--------|--------|----------|--------|--------|
|   |                                           |   |   |     |   |   |   |   |
|   | Fair value of plan assets at beginning of year |   | $      | 223,688  |   | $      | 248,346 |   |
|   | Actual return on plan assets                   |   |   | 45,648   |   |   | (3,245 | ) |
|   | Employer contributions                         |   |   | 6,094    |   |   | 2,581 |   |
|   | Gross benefits paid **                         |   |   | (34,508  | )      |   | (23,994 | ) |
|   | Fair value of plan assets at end of year       |   | $      | 240,922  |   | $      | 223,688 |   |
|   |                                           |   |   |     |   |   |   |   |
|   | Funded status of plans, end of year            |   | $      | (157,438 | )      | $      | (154,344 | ) |

|   | *      | Due to the change in measurement date, fiscal year 2009 amounts reflect 15 months of activity from July 1, 2008 to September 30, 2009.  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                        |
|   | **     | Includes $(2,293) lump-sum payments recognized as settlements in fiscal year 2010. No lump-sum payments were recognized as settlements in fiscal year 2009. |

|   | (Thousands)                                                                           |   | 2010   |     | 2009   |   |
|--------|---------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|
|   |                                                                                  |   |   |     |   |   |   |   |
|   | Current liabilities                                                                   |   | $      | (2,420   | )      | $      | (1,920 | ) |
|   | Noncurrent liabilities                                                                |   |   | (155,018 | )      |   | (152,424 | ) |
|   |   Total                                                                     |   | $      | (157,438 | )      | $      | (154,344 | ) |
|   |                                                                                  |   |   |     |   |   |   |   |
|   | Pre-tax amounts recognized in accumulated other comprehensive income                  |   |   |     |   |   |   |   |
|   |   not yet recognized as components of net periodic pension cost consist of: |   |   |     |   |   |   |   |
|   | Net actuarial loss                                                                    |   | $      | 157,327  |   | $      | 162,689 |   |
|   | Prior service costs                                                                   |   |   | 6,245    |   |   | 9,950 |   |
|   |   Sub-total                                                                 |   |   | 163,572  |   |   | 172,639 |   |
|   | Adjustments for amounts included in Regulatory Assets                                 |   |   | (158,867 | )      |   | (168,246 | ) |
|   |   Total                                                                     |   | $      | 4,705    |   | $      | 4,393 |   |

|   | (Thousands)                        |   |   |    |
|--------|------------------------------------|--------|--------|---------|
|   |                               |   |   |    |   |
|   | Amortization of net actuarial loss |   | $      | 10,228  |   |
|   | Amortization of prior service cost |   |   | 642     |   |
|   |   Sub-total              |   |   | 10,870  |   |
|   | Regulatory adjustment              |   |   | (10,444 | ) |
|   |   Total                  |   | $      | 426     |   |

|   |                                                  | 2010   |   | 2009   |   | 2008   |
|--------|-------------------------------------------------------|--------|--------|--------|--------|--------|
|   |                                                  |   |   |   |   |   |
|   | Weighted average discount rate                        | 5.25%  |   | 6.60%  |   | 6.25%  |
|   | Weighted average rate of future compensation increase | 3.25%  |   | 3.75%  |   | 3.50%  |
|   | Expected long-term rate of return on plan assets      | 8.25%  |   | 8.25%  |   | 8.25%  |

|   |                                                  | 2010   |   | 2009   |
|--------|-------------------------------------------------------|--------|--------|--------|
|   |                                                  |   |   |   |
|   | Weighted average discount rate                        | 4.75%  |   | 5.25%  |
|   | Weighted average rate of future compensation increase | 3.00%  |   | 3.25%  |

|   | (Thousands)                    |   | 2010   |    | 2009   |   |
|--------|--------------------------------|--------|--------|---------|--------|--------|
|   |                           |   |   |    |   |   |   |   |
|   | Projected benefit obligation   |   | $      | 398,360 |   | $      | 378,032 |   |
|   | Fair value of plan assets      |   |   | 240,922 |   |   | 223,688 |   |
|   |                           |   |   |    |   |   |   |   |
|   | Accumulated benefit obligation |   |   | 338,042 |   |   | 305,255 |   |
|   | Fair value of plan assets      |   |   | 240,922 |   |   | 223,688 |   |

|   |              | 2011   |   | 2010   |   | 2009   |
|--------|-------------------|--------|--------|--------|--------|--------|
|   |              | Target |   | Actual |   | Actual |
|   |              |   |   |   |   |   |
|   | Equity Strategy   | 50%    |   | 49%    |   | 50%    |
|   | Debt Securities   | 50%    |   | 51%    |   | 50%    |
|   |   Total | 100%   |   | 100%   |   | 100%   |

|   |  (Millions)  |   |  Pensions fromQualified Trust |   | Pensions fromLaclede GasFunds |   |
|--------|-------------------|--------|------------------------------------|--------|-------------------------------|--------|
|   |              |   |                               |   |                          |   |   |   |   |   |   |   |
|   | 2011              |   |                               | $      | 22.0                          |   |   |   | $ | 2.4 |   |   |
|   | 2012              |   |                               |   | 20.8                          |   |   |   |   | 1.5 |   |   |
|   | 2013              |   |                               |   | 23.8                          |   |   |   |   | 1.0 |   |   |
|   | 2014              |   |                               |   | 25.9                          |   |   |   |   | 0.8 |   |   |
|   | 2015              |   |                               |   | 30.1                          |   |   |   |   | 0.7 |   |   |
|   | 2016 – 2020 |   |                               |   | 188.2                         |   |   |   |   | 3.7 |   |   |

|   | (Thousands)                                            |   | 2010   |   | 2009   |   | 2008   |   |
|--------|--------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|   |                                                   |   |   |   |   |   |   |   |   |   |   |
|   | Service cost – benefits earned during the period |   | $      | 6,442  |   | $      | 5,132  |   | $ | 4,560 |   |
|   | Interest cost on accumulated postretirement            |   |   |   |   |   |   |   |   |   |   |
|   |   benefit obligation                         |   |   | 4,515  |   |   | 4,679  |   |   | 3,909 |   |
|   | Expected return on plan assets                         |   |   | (3,032 | )      |   | (2,376 | )      |   | (2,039 | ) |
|   | Amortization of transition obligation                  |   |   | 136    |   |   | 136    |   |   | 136 |   |
|   | Amortization of prior service credit                   |   |   | (2,328 | )      |   | (2,328 | )      |   | (2,328 | ) |
|   | Amortization of actuarial loss                         |   |   | 3,980  |   |   | 3,509  |   |   | 2,985 |   |
|   | Sub-total                                              |   |   | 9,713  |   |   | 8,752  |   |   | 7,223 |   |
|   | Regulatory adjustment                                  |   |   | (2,071 | )      |   | (1,110 | )      |   | 419 |   |
|   | Net postretirement benefit cost                        |   | $      | 7,642  |   | $      | 7,642  |   | $ | 7,642 |   |

|   | (Thousands)                                    |   | 2010   |    | 2009   |   | 2008    |   |
|--------|------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
|   |                                           |   |   |    |   |   |    |   |   |   |   |
|   | Current year actuarial loss                    |   | $      | 6,713   |   | $      | 11,137  |   | $ | 9,772 |   |
|   | Amortization of actuarial loss                 |   |   | (3,980  | )      |   | (3,509  | )      |   | (2,985 | ) |
|   | Amortization of prior service credit           |   |   | 2,328   |   |   | 2,328   |   |   | 2,328 |   |
|   | Amortization of transition obligation          |   |   | (136    | )      |   | (136    | )      |   | (136 | ) |
|   | Sub-total                                      |   |   | 4,925   |   |   | 9,820   |   |   | 8,979 |   |
|   | Regulatory adjustment                          |   |   | (4,925  | )      |   | (9,820  | )      |   | (8,979 | ) |
|   | Total recognized in other comprehensive income |   | $      | — |   | $      | — |   | $ | — |   |

|   | (Thousands)                             |   | 2010   |   | 2009 * |   |
|--------|-----------------------------------------|--------|--------|--------|--------|--------|
|   |                                    |   |   |   |   |   |   |   |
|   | Benefit obligation at beginning of year |   | $      | 83,631 |   | $      | 69,714 |   |
|   | Service cost                            |   |   | 6,442  |   |   | 6,415 |   |
|   | Interest cost                           |   |   | 4,515  |   |   | 5,848 |   |
|   | Actuarial loss                          |   |   | 7,564  |   |   | 7,298 |   |
|   | Gross benefits paid                     |   |   | (4,173 | )      |   | (5,644 | ) |
|   | Benefit obligation at end of year       |   | $      | 97,979 |   | $      | 83,631 |   |

|   | * | Due to the change in measurement date, fiscal year 2009 amounts reflect 15 months of activity from July 1, 2008 to September 30, 2009. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (Thousands)                                    |   | 2010   |    | 2009 * |   |
|--------|------------------------------------------------|--------|--------|---------|--------|--------|
|   |                                           |   |   |    |   |   |   |   |
|   | Fair value of plan assets at beginning of year |   | $      | 33,561  |   | $      | 26,082 |   |
|   | Actual return on plan assets                   |   |   | 3,883   |   |   | (869 | ) |
|   | Employer contributions                         |   |   | 11,819  |   |   | 13,992 |   |
|   | Gross benefits paid                            |   |   | (4,173  | )      |   | (5,644 | ) |
|   | Fair value of plan assets at end of year       |   | $      | 45,090  |   | $      | 33,561 |   |
|   |                                           |   |   |    |   |   |   |   |
|   | Funded status of plans, end of year            |   | $      | (52,889 | )      | $      | (50,070 | ) |

|   | * | Due to the change in measurement date, fiscal year 2009 amounts reflect 15 months of activity from July 1, 2008 to September 30, 2009. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (Thousands)                                                                      |   | 2010   |    | 2009   |   |
|--------|----------------------------------------------------------------------------------|--------|--------|---------|--------|--------|
|   |                                                                             |   |   |    |   |   |   |   |
|   | Current liabilities                                                              |   | $      | (300    | )      | $      | (280 | ) |
|   | Noncurrent liabilities                                                           |   |   | (52,589 | )      |   | (49,790 | ) |
|   |   Total                                                                |   | $      | (52,889 | )      | $      | (50,070 | ) |
|   |                                                                             |   |   |    |   |   |   |   |
|   | Pre-tax amounts recognized in accumulated other comprehensive income             |   |   |    |   |   |   |   |
|   |   not yet recognized as components of net periodic postretirement cost |   |   |    |   |   |   |   |
|   |     consist of:                                              |   |   |    |   |   |   |   |
|   | Net actuarial loss                                                               |   | $      | 49,442  |   | $      | 46,709 |   |
|   | Prior service credit                                                             |   |   | (4,423  | )      |   | (6,751 | ) |
|   | Transition obligation                                                            |   |   | 365     |   |   | 501 |   |
|   |   Sub-total                                                            |   |   | 45,384  |   |   | 40,459 |   |
|   | Adjustments for amounts included in Regulatory Assets                            |   |   | (45,384 | )      |   | (40,459 | ) |
|   |   Total                                                                |   | $      | — |   | $      | — |   |

|   |   (Thousands)                           |   |   |    |   |
|--------|----------------------------------------------|--------|--------|---------|--------|
|   |   Amortization of net actuarial loss    |   | $      | 4,443   |   |
|   |   Amortization of prior service credit  |   |   | (2,328  | )      |
|   |   Amortization of transition obligation |   |   | 136     |   |
|   |     Sub-total                 |   |   | 2,251   |   |
|   |   Regulatory adjustment                 |   |   | (2,251  | )      |
|   |     Total                     |   | $      | — |   |

|   |                                                  | 2010   |   | 2009   |   | 2008   |
|--------|-------------------------------------------------------|--------|--------|--------|--------|--------|
|   |                                                  |   |   |   |   |   |
|   | Weighted average discount rate                        | 5.15%  |   | 6.35%  |   | 6.25%  |
|   | Weighted average rate of future compensation increase | 3.25%  |   | 3.75%  |   | 3.50%  |
|   | Expected long-term rate of return on plan assets      | 8.25%  |   | 8.25%  |   | 8.25%  |

|   |                                                  | 2010   |   | 2009   |
|--------|-------------------------------------------------------|--------|--------|--------|
|   |                                                  |   |   |   |
|   | Weighted average discount rate                        | 4.70%  |   | 5.15%  |
|   | Weighted average rate of future compensation increase | 3.00%  |   | 3.25%  |

|   |                                                            | 2010   |   | 2009   |
|--------|-----------------------------------------------------------------|--------|--------|--------|
|   | Medical cost trend assumed for next year                        | 8.00%  |   | 8.00%  |
|   | Rate to which the medical cost trend rate is assumed to decline |   |   |   |
|   |     (the ultimate medical cost trend rate)  | 5.00%  |   | 5.00%  |
|   | Year that the rate reaches the ultimate trend                   | 2017   |   | 2016   |

|   | (Thousands)                                             |   | 1% Increase |   | 1% Decrease |   |
|--------|---------------------------------------------------------|--------|-------------|--------|-------------|--------|
|   |                                                    |   |        |   |        |   |   |   |   |   |
|   | Effect on net periodic postretirement benefit cost      |   |        | $      | 1,270       |   |   | $ | (1,130 | ) |
|   | Effect on accumulated postretirement benefit obligation |   |        |   | 5,850       |   |   |   | (5,300 | ) |

|   |              | 2011   |   | 2010   |   | 2009   |
|--------|-------------------|--------|--------|--------|--------|--------|
|   |              | Target |   | Actual |   | Actual |
|   |              |   |   |   |   |   |
|   | Equity Securities | 60%    |   | 59%    |   | 58%    |
|   | Debt Securities   | 40%    |   | 41%    |   | 42%    |
|   |   Total | 100%   |   | 100%   |   | 100%   |

|   |  (Millions)  |   | Benefits PaidfromQualified Trust |    | Benefits Paidfrom Laclede GasFunds |   |
|--------|-------------------|--------|----------------------------------|--------------|------------------------------------|--------|
|   |              |   |                             |         |                               |   |   |   |   |   |   |   |
|   | 2011              |   |                             | $            | 5.0                                |   |   |   | $ | 0.3 |   |   |
|   | 2012              |   |                             |         | 5.3                                |   |   |   |   | 0.3 |   |   |
|   | 2013              |   |                             |         | 5.5                                |   |   |   |   | 0.3 |   |   |
|   | 2014              |   |                             |         | 5.9                                |   |   |   |   | 0.3 |   |   |
|   | 2015              |   |                             |         | 6.4                                |   |   |   |   | 0.3 |   |   |
|   | 2016 – 2020 |   |                             |         | 45.7                               |   |   |   |   | 1.9 |   |   |

|   | (Thousands)                                                       |   |   | QuotedPrices inActiveMarkets(Level 1) |   |   | SignificantObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |   | Total   |   |
|--------|-------------------------------------------------------------------|--------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|--------|----------------------------------------|--------|--------|---------|--------|
|   | As of September 30, 2010                                |   |   |                                  |   |   |                                 |   |   |                                   |   |   |    |   |
|   | Cash and cash equivalents                                         |   | $      | 1,406                                 |   | $      | —                              |   | $      | —                                |   | $      | 1,406   |   |
|   | Debt Securities                                                   |   |   |                                  |   |   |                                 |   |   |                                   |   |   |    |   |
|   |   U.S. bond mutual funds                                |   |   | 33,082                                |   |   | —                              |   |   | —                                |   |   | 33,082  |   |
|   |   U.S. government                                       |   |   | —                               |   |   | 90,993                               |   |   | —                                |   |   | 90,993  |   |
|   |   U.S. corporate                                        |   |   | —                               |   |   | 90,476                               |   |   | —                                |   |   | 90,476  |   |
|   |   U.S. municipal                                        |   |   | —                               |   |   | 6,241                                |   |   | —                                |   |   | 6,241   |   |
|   |   International                                         |   |   | —                               |   |   | 18,676                               |   |   | —                                |   |   | 18,676  |   |
|   | Derivative instruments (a)                                        |   |   | —                               |   |   | 9                                    |   |   | —                                |   |   | 9       |   |
|   | Other                                                             |   |   | —                               |   |   | 39                                   |   |   | —                                |   |   | 39      |   |
|   |           Total |   | $      | 34,488                                |   | $      | 206,434                              |   | $      | —                                |   | $      | 240,922 |   |

|   | (a) | Derivative assets of $10,399 net of cash margin payable of $10,390. |
|--------|-----|---------------------------------------------------------------------|

|   | (Thousands)                                                       |   |   | QuotedPrices inActiveMarkets(Level 1) |   |   | SignificantObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |   | Total  |   |
|--------|-------------------------------------------------------------------|--------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|--------|----------------------------------------|--------|--------|--------|--------|
|   | As of September 30, 2010                                |   |   |                                  |   |   |                                 |   |   |                                   |   |   |   |   |
|   | Cash and cash equivalents                                         |   | $      | 1,021                                 |   | $      | —                              |   | $      | —                                |   | $      | 1,021  |   |
|   | U.S. stock/bond mutual fund                                       |   |   | 44,069                                |   |   | —                              |   |   | —                                |   |   | 44,069 |   |
|   |           Total |   | $      | 45,090                                |   | $      | —                              |   | $      | —                                |   | $      | 45,090 |   |

| 3. | STOCKHOLDER’S EQUITY |
|----|----------------------------|

|   | (Thousands)                                                       |   |  Net Unrealized Gains (Losses) on Cash Flow Hedges | Defined Benefit Pension and OtherPostretirementBenefit Plans | Total   |   |
|--------|-------------------------------------------------------------------|--------|---------------------------------------------------------|--------------------------------------------------------------|---------|--------|
|   | Balance, September 30, 2008                                       |   |                                                    | $                                                            | — |   |   | $ | (1,790 | ) |   | $ | (1,790 | ) |
|   | Current-period change                                             |   |                                                    |                                                         | 79      |   |   |   | (939 | ) |   |   | (860 | ) |
|   | Adoption of SFAS No. 158, as codified in  ASC Topic 715 |   |                                                    |                                                         | — |   |   |   | 31 |   |   |   | 31 |   |
|   | Balance, September 30, 2009                                       |   |                                                    |                                                         | 79      |   |   |   | (2,698 | ) |   |   | (2,619 | ) |
|   | Current-period change                                             |   |                                                    |                                                         | (64     | )      |   |   | (192 | ) |   |   | (256 | ) |
|   | Balance, September 30, 2010                                       |   |                                                    | $                                                            | 15      |   |   | $ | (2,890 | ) |   | $ | (2,875 | ) |

| 4. | LONG-TERM DEBT |
|----|----------------|

|   | 2011 | $25 million |     (Paid at maturity on November 15, 2010) |
|--------|------|-------------|------------------------------------------------------------|
|   | 2012 | —     |                                                       |
|   | 2013 | $25 million |                                                       |
|   | 2014 | —     |                                                       |
|   | 2015 | —     |                                                       |

Note 3

| 5. | NOTES PAYABLE AND CREDIT AGREEMENTS |
|----|-------------------------------------|

| 6. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
|----|-------------------------------------|

|   |  (Thousands)                         |   | CarryingAmount |    | FairValue |   |
|--------|-------------------------------------------|--------|----------------|---------|-----------|--------|
|   |                                      |   |           |    |      |   |   |   |
|   | 2010:                                     |   |           |    |      |   |   |   |
|   | Cash and cash equivalents                 |   | $              | 1,009   |      | $      | 1,009 |   |
|   | Marketable securities                     |   |           | 12,856  |      |   | 12,856 |   |
|   | Derivative instrument assets              |   |           | 10,974  |      |   | 10,974 |   |
|   | Short-term debt                           |   |           | 129,650 |      |   | 129,650 |   |
|   | Long-term debt, including current portion |   |           | 389,298 |      |   | 443,959 |   |
|   |                                      |   |           |    |      |   |   |   |
|   | 2009:                                     |   |           |    |      |   |   |   |
|   | Cash and cash equivalents                 |   | $              | 1,402   |      | $      | 1,402 |   |
|   | Marketable securities                     |   |           | 11,110  |      |   | 11,110 |   |
|   | Derivative instrument assets              |   |           | 12,369  |      |   | 12,369 |   |
|   | Short-term debt                           |   |           | 129,800 |      |   | 129,800 |   |
|   | Long-term debt                            |   |           | 389,240 |      |   | 423,375 |   |

Note 7

| 7. | FAIR VALUE MEASUREMENTS |
|----|-------------------------|

|   | (Thousands)                                                                   |   |   | QuotedPrices inActiveMarkets(Level 1) |   |   | SignificantObservableInputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |   | Effects of Netting and Cash Margin Receivables/Payables |   |   | Total   |   |
|--------|-------------------------------------------------------------------------------|--------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|--------|----------------------------------------|--------|--------|---------------------------------------------------------|--------|--------|---------|--------|
|   | As of September 30, 2010                                            |   |   |                                  |   |   |                                 |   |   |                                   |   |   |                                                    |   |   |    |   |
|   | Assets                                                                        |   |   |                                  |   |   |                                 |   |   |                                   |   |   |                                                    |   |   |    |   |
|   |   U. S. Stock/Bond Mutual Funds                                     |   | $      | 12,856                                |   | $      | —                              |   | $      | —                                |   | $      | —                                                 |   | $      | 12,856  |   |
|   |   NYMEX natural gas contracts                                       |   |   | 1,909                                 |   |   | —                              |   |   | —                                |   |   | 8,786                                                   |   |   | 10,695  |   |
|   |   NYMEX gasoline and heating    oil contracts   |   |   | 59                                    |   |   | —                              |   |   | —                                |   |   | 220                                                     |   |   | 279     |   |
|   |         Total                         |   | $      | 14,824                                |   | $      | —                              |   | $      | —                                |   | $      | 9,006                                                   |   | $      | 23,830  |   |
|   |                                                                          |   |   |                                  |   |   |                                 |   |   |                                   |   |   |                                                    |   |   |    |   |
|   | Liabilities                                                                   |   |   |                                  |   |   |                                 |   |   |                                   |   |   |                                                    |   |   |    |   |
|   |   NYMEX natural gas contracts                                       |   | $      | 40,537                                |   | $      | —                              |   | $      | —                                |   | $      | (40,537                                                 | )      | $      | — |   |
|   |   NYMEX gasoline & heating    oil contracts |   |   | 37                                    |   |   | —                              |   |   | —                                |   |   | (37                                                     | )      |   | — |   |
|   |         Total                         |   | $      | 40,574                                |   | $      | —                              |   | $      | —                                |   | $      | (40,574                                                 | )      | $      | — |   |
|   |                                                                          |   |   |                                  |   |   |                                 |   |   |                                   |   |   |                                                    |   |   |    |   |
|   | As of September 30, 2009                                            |   |   |                                  |   |   |                                 |   |   |                                   |   |   |                                                    |   |   |    |   |
|   | Assets                                                                        |   |   |                                  |   |   |                                 |   |   |                                   |   |   |                                                    |   |   |    |   |
|   |   U. S. Stock/Bond Mutual Funds                                     |   | $      | 11,110                                |   | $      | —                              |   | $      | —                                |   | $      | —                                                 |   | $      | 11,110  |   |
|   |   NYMEX natural gas contracts                                       |   |   | 6,971                                 |   |   | —                              |   |   | —                                |   |   | 5,121                                                   |   |   | 12,092  |   |
|   |   NYMEX gasoline and heating    oil contracts   |   |   | 278                                   |   |   | —                              |   |   | —                                |   |   | (1                                                      | )      |   | 277     |   |
|   |         Total                         |   | $      | 18,359                                |   | $      | —                              |   | $      | —                                |   | $      | 5,120                                                   |   | $      | 23,479  |   |
|   |                                                                          |   |   |                                  |   |   |                                 |   |   |                                   |   |   |                                                    |   |   |    |   |
|   | Liabilities                                                                   |   |   |                                  |   |   |                                 |   |   |                                   |   |   |                                                    |   |   |    |   |
|   |   NYMEX natural gas contracts                                       |   | $      | 53,144                                |   | $      | —                              |   | $      | —                                |   | $      | (53,144                                                 | )      | $      | — |   |

Note 8

| 8. | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
|----|-----------------------------------------------|

|   |                                |   | MMBtu(millions) |   | Avg. PricePerMMBtu |
|--------|-------------------------------------|--------|-----------------|--------|--------------------|
|   | Open long futures positions         |   |            |   |               |   |   |
|   |     Fiscal 2011 |   | 13.16           |   | $                  | 6.19 |   |
|   |     Fiscal 2012 |   | 4.94            |   |               | 5.47 |   |

| The Effect of Derivative Instruments on the Statements of Income and Statements of Comprehensive Income   |   |
|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   | Location of Gain (Loss) |   |   |   |   |   |   |   |   |   |   |   |
| (Thousands)                                                                                               |   | Recorded in Income |   |   |   | 2010 |   |   |   |   | 2009 (a) |   |   |
| Derivatives in Cash Flow Hedging Relationships                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NYMEX gasoline and heating oil contracts:                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Effective portion of gain (loss) recognized in    OCI on derivative       |   |   |   |   | $ | 160 |   |   |   | $ | 248 |   |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Effective portion of gain (loss) reclassified from    AOCI to income      |   | Utility – Other Operation Expenses |   |   |   | 264 |   |   |   |   | 119 |   |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Ineffective portion of gain (loss) on derivatives    recognized in income |   | Utility – Other Operation Expenses |   |   |   | (57 | ) |   |   |   | 198 |   |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives Not Designated as Hedging Instruments (b)                                                     |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NYMEX gasoline and heating oil contracts:                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Gain (loss) recognized in income on derivative                                                |   | Other Income and (Income Deductions) - Net |   |   | $ | (1 | ) |   |   | $ | 17 |   |   |

| (a)       | The Utility prospectively adopted SFAS No. 161, as codified in ASC Topic 815, in the second quarter of fiscal year 2009. Accordingly, amounts disclosed in this column exclude activity prior to January 1, 2009.                                                                                                                                                                                           |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)  | Gains and losses on Laclede Gas' NYMEX natural gas derivative instruments, which are not designeated as hedging instruments for financial reporting purposes, are deferred pursuant to the Utility's PGA Clause and recorded as regulatory assets or regulatory liabilities. These gains and losses are excluded from the table above because they have no direct impact on the Statements of Income.  |

| Fair Value of Derivative Instruments in the Balance Sheet at September 30, 2010 |   |
|---------------------------------------------------------------------------------|--------|
|                                                                            |   |   |   |   |   |
|                                                                            |   | Asset Derivatives |   | Liability Derivatives |   |
| (Thousands)                                                                     |   | Balance Sheet Location |   | Fair Value | * | Balance Sheet Location |   | Fair Value | * |
| Derivatives designated as hedging instruments                                   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |
|   NYMEX gasoline and heating oil contracts                            |   | Derivative Instrument Assets | $ | 56 |   | Derivative Instrument Assets | $ | 34 |   |
|                                                                            |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments                               |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |
|   NYMEX natural gas contracts                                         |   | Derivative Instrument Assets |   | 1,401 |   | Derivative Instrument Assets |   | 37,457 |   |
|                                                                            |   | Other Deferred Charges |   | 508 |   | Other Deferred Charges |   | 3,080 |   |
|   NYMEX gasoline and heating oil contracts                            |   | Derivative Instrument Assets |   | 3 |   | Derivative Instrument Assets |   | 3 |   |
|         Sub-total                       |   |   |   | 1,912 |   |   |   | 40,540 |   |
|   Total derivatives                                                   |   |   | $ | 1,968 |   |   | $ | 40,574 |   |
|                                                                            |   |   |   |   |   |   |   |   |   |
| Fair Value of Derivative Instruments in the Balance Sheet at September 30, 2009 |   |
|                                                                            |   |   |   |   |   |   |   |   |   |
|                                                                            |   | Asset Derivatives |   | Liability Derivatives |   |
| (Thousands)                                                                     |   | Balance Sheet Location |   | Fair Value | * | Balance Sheet Location |   | Fair Value | * |
| Derivatives designated as hedging instruments                                   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |
|   NYMEX gasoline and heating oil contracts                            |   | Derivative Instrument Assets | $ | 278 |   | Derivative Instrument Assets | $ | — |   |
|                                                                            |   |   |   |   |   |   |   |   |   |
| Derivatives not designated as hedging instruments                               |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |
|   NYMEX natural gas contracts                                         |   | Derivative Instrument Assets |   | 6,971 |   | Derivative Instrument Assets |   | 53,144 |   |
|   Total derivatives                                                   |   |   | $ | 7,249 |   |   | $ | 53,144 |   |

| * | The fair values of Asset Derivatives and Liability Derivatives exclude the fair value of cash margin receivables or payables with counterparties subject to netting arrangements. Fair value amounts of derivative contracts (including the fair value amounts of cash margin receivables and payables) for which there is a legal right to set off are presented net on the Balance Sheets. As such, the gross balances presented in the table above are not indicative of the Utility’s net economic exposure. Refer to Note 7, Fair Value Measurements, for information on the valuation of derivative instruments. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (Thousands)                                                        |   | 2010   |    | 2009   |   |
|--------|--------------------------------------------------------------------|--------|--------|---------|--------|--------|
|   |                                                               |   |   |    |   |   |   |   |
|   | Fair value of asset derivatives presented above                    |   | $      | 1,968   |   | $      | 7,249 |   |
|   | Fair value of cash margin receivables                              |   |   | 49,580  |   |   | 58,264 |   |
|   | Netting of assets and liabilities with the same counterparty       |   |   | (40,574 | )      |   | (53,144 | ) |
|   |   Total                                                  |   | $      | 10,974  |   | $      | 12,369 |   |
|   |                                                               |   |   |    |   |   |   |   |
|   | Derivative Instrument Assets, per Balance Sheets:                  |   |   |    |   |   |   |   |
|   |   Derivative instrument assets                           |   | $      | 9,288   |   | $      | 12,369 |   |
|   |   Other deferred charges                                 |   |   | 1,686   |   |   | — |   |
|   |     Total                                      |   | $      | 10,974  |   | $      | 12,369 |   |
|   |                                                               |   |   |    |   |   |   |   |
|   | Fair value of liability derivatives presented above                |   | $      | 40,574  |   | $      | 53,144 |   |
|   | Netting of assets and liabilities with the same counterparty       |   |   | (40,574 | )      |   | (53,144 | ) |
|   |   Derivative instrument liabilities, per Balance Sheets* |   | $      | — |   | $      | — |   |
|   |                                                               |   |   |    |   |   |   |   |
| *      | Included in the Other line of the Current Liabilities section      |   |   |    |   |   |   |   |

| 9. | INCOME TAXES |
|----|--------------|

|   | (Thousands)                                    |   | 2010   |    | 2009   |   | 2008   |   |
|--------|------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|
|   |                                           |   |   |    |   |   |   |   |   |   |   |
|   | Included in Statements of Income:              |   |   |    |   |   |   |   |   |   |   |
|   |   Federal                            |   |   |    |   |   |   |   |   |   |   |
|   |     Current                |   | $      | (11,412 | )      | $      | (6,437 | )      | $ | 7,476 |   |
|   |     Deferred               |   |   | 27,222  |   |   | 18,423 |   |   | 5,762 |   |
|   |     Investment tax credits |   |   | (216    | )      |   | (219   | )      |   | (227 | ) |
|   |   State and local                    |   |   |    |   |   |   |   |   |   |   |
|   |     Current                |   |   | (1,892  | )      |   | (1,108 | )      |   | 1,153 |   |
|   |     Deferred               |   |   | 4,448   |   |   | 3,200  |   |   | 1,100 |   |
|   | Total Income Tax Expense                       |   | $      | 18,150  |   | $      | 13,859 |   | $ | 15,264 |   |

|   |                                         |   | 2010   |   | 2009   |   | 2008   |    |
|--------|----------------------------------------------|--------|--------|--------|--------|--------|--------|---------|
|   |                                         |   |   |   |   |   |   |    |   |   |   |
|   | Federal income tax statutory rate            |   |   | 35.0   | %      |   | 35.0   |  % |   | 35.0 |  % |
|   | State and local income taxes, net of federal |   |   |   |   |   |   |    |   |   |   |
|   |   income tax benefits              |   |   | 2.9    |   |   | 2.9    |    |   | 2.7 |   |
|   | Certain expenses capitalized on books and    |   |   |   |   |   |   |    |   |   |   |
|   |   deducted on tax return           |   |   | (5.6   | )      |   | (5.9   | )       |   | (5.4 | ) |
|   | Taxes related to prior years                 |   |   | (0.4   | )      |   | (0.5   | )       |   | (1.4 | ) |
|   | Other items – net                      |   |   | (0.5   | )      |   | (2.0   | )       |   | (2.9 | ) |
|   | Effective income tax rate                    |   |   | 31.4   | %      |   | 29.5   |  % |   | 28.0 |  % |

|   | (Thousands)                                                        |   | 2010   |    | 2009   |   |
|--------|--------------------------------------------------------------------|--------|--------|---------|--------|--------|
|   |                                                               |   |   |    |   |   |   |   |
|   | Deferred tax assets:                                               |   |   |    |   |   |   |   |
|   |   Reserves not currently deductible                      |   | $      | 18,808  |   | $      | 19,419 |   |
|   |   Pension and other postretirement benefits              |   |   | 78,790  |   |   | 80,508 |   |
|   |   Unamortized investment tax credits                     |   |   | 2,222   |   |   | 2,358 |   |
|   |   Other                                                  |   |   | 7,108   |   |   | 10,015 |   |
|   |       Total deferred tax assets      |   |   | 106,928 |   |   | 112,300 |   |
|   |                                                               |   |   |    |   |   |   |   |
|   | Deferred tax liabilities:                                          |   |   |    |   |   |   |   |
|   |   Relating to property                                   |   |   | 255,901 |   |   | 221,392 |   |
|   |   Regulatory pension and other postretirement benefits   |   |   | 110,396 |   |   | 109,041 |   |
|   |   Deferred gas costs                                     |   |   | 22,126  |   |   | 16,609 |   |
|   |   Other                                                  |   |   | 15,519  |   |   | 22,551 |   |
|   |       Total deferred tax liabilities |   |   | 403,942 |   |   | 369,593 |   |
|   |                                                               |   |   |    |   |   |   |   |
|   | Net deferred tax liability                                         |   |   | 297,014 |   |   | 257,293 |   |
|   | Net deferred tax liability – current                         |   |   | (4,248  | )      |   | (912 | ) |
|   | Net deferred tax liability – non-current                     |   | $      | 292,766 |   | $      | 256,381 |   |

|   | (Thousands)                                              |   | 2010   |   | 2009   |   |
|--------|----------------------------------------------------------|--------|--------|--------|--------|--------|
|   |                                                     |   |   |   |   |   |   |   |
|   | Unrecognized tax benefits, beginning of year             |   | $      | 1,366  |   | $      | 1,033 |   |
|   | Increases related to tax positions taken in current year |   |   | 5,017  |   |   | 333 |   |
|   | Unrecognized tax benefits, end of year                   |   | $      | 6,383  |   | $      | 1,366 |   |

| 10. | OTHER INCOME AND (INCOME DEDUCTIONS) – NET |
|-----|--------------------------------------------------|

|   | (Thousands)                                      |   | 2010   |   | 2009   |   | 2008   |   |
|--------|--------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|   |                                             |   |   |   |   |   |   |   |   |   |   |
|   | Interest income                                  |   | $      | 1,493  |   | $      | 2,505  |   | $ | 2,133 |   |
|   | Net investment gain (loss)                       |   |   | 890    |   |   | 229    |   |   | (1,403 | ) |
|   | Other income                                     |   |   | 161    |   |   | 316    |   |   | 69 |   |
|   | Other income deductions                          |   |   | 25     |   |   | 78     |   |   | 407 |   |
|   | Other Income and (Income Deductions) – Net |   | $      | 2,569  |   | $      | 3,128  |   | $ | 1,206 |   |

| 11. | INFORMATION BY OPERATING SEGMENT |
|-----|----------------------------------|

Note 1

|                            |   | Regulated Gas |      | Non-Regulated |   | Adjustments & |   |   |    |
|---------------------------------|--------|---------------|-----------|---------------|--------|-------------------|--------|--------|---------|
| (Thousands)                     |   | Distribution  |      | Other         |   | Eliminations      |   | Total  |    |
|                            |   |          |      |          |   |              |   |   |    |   |   |   |   |
| FISCAL 2010                     |   |          |      |          |   |              |   |   |    |   |   |   |   |
| Operating revenues              |   | $             | 864,297   |          | $      | 10,327            |   | $      | — |   | $ | 874,624 |   |
| Depreciation & amortization |   |          | 37,572    |          |   | —           |   |   | — |   |   | 37,572 |   |
| Interest income                 |   |          | 1,493     |          |   | —           |   |   | — |   |   | 1,493 |   |
| Interest charges                |   |          | 26,852    |          |   | —           |   |   | — |   |   | 26,852 |   |
| Income tax expense              |   |          | 15,842    |          |   | 2,308             |   |   | — |   |   | 18,150 |   |
| Net economic earnings           |   |          | 36,141    |          |   | 3,675             |   |   | — |   |   | 39,816 |   |
| Total assets                    |   |          | 1,657,530 |          |   | 922               |   |   | — |   |   | 1,658,452 |   |
| Capital expenditures            |   |          | 56,234    |          |   | —           |   |   | — |   |   | 56,234 |   |
|                            |   |          |      |          |   |              |   |   |    |   |   |   |   |
| FISCAL 2009                     |   |          |      |          |   |              |   |   |    |   |   |   |   |
| Operating revenues              |   | $             | 1,053,993 |          | $      | 2,246             |   | $      | — |   | $ | 1,056,239 |   |
| Depreciation & amortization |   |          | 36,751    |          |   | —           |   |   | — |   |   | 36,751 |   |
| Interest income                 |   |          | 2,505     |          |   | —           |   |   | — |   |   | 2,505 |   |
| Interest charges                |   |          | 30,353    |          |   | —           |   |   | — |   |   | 30,353 |   |
| Income tax expense              |   |          | 13,856    |          |   | 3                 |   |   | — |   |   | 13,859 |   |
| Net economic earnings           |   |          | 33,072    |          |   | 6                 |   |   |    |   |   | 33,078 |   |
| Total assets                    |   |          | 1,598,600 |          |   | 1,687             |   |   | — |   |   | 1,600,287 |   |
| Capital expenditures            |   |          | 51,384    |          |   | —           |   |   | — |   |   | 51,384 |   |
|                            |   |          |      |          |   |              |   |   |    |   |   |   |   |
| FISCAL 2008                     |   |          |      |          |   |              |   |   |    |   |   |   |   |
| Operating revenues              |   | $             | 1,128,287 |          | $      | 2,693             |   | $      | — |   | $ | 1,130,980 |   |
| Depreciation & amortization |   |          | 35,303    |          |   | —           |   |   | — |   |   | 35,303 |   |
| Interest income                 |   |          | 2,133     |          |   | —           |   |   | — |   |   | 2,133 |   |
| Interest charges                |   |          | 30,214    |          |   | —           |   |   | — |   |   | 30,214 |   |
| Income tax expense              |   |          | 15,244    |          |   | 20                |   |   | — |   |   | 15,264 |   |
| Net economic earnings           |   |          | 39,174    |          |   | 32                |   |   |    |   |   | 39,206 |   |
| Total assets                    |   |          | 1,624,041 |          |   | 1,774             |   |   | — |   |   | 1,625,815 |   |
| Capital expenditures            |   |          | 55,304    |          |   | —           |   |   | — |   |   | 55,304 |   |

|   | Reconciliation of Net Economic Earnings to Net Income                                                             |   |
|--------|-------------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                              |   |   |   |   |   |   |   |
|   | (Thousands)                                                                                                       |   | 2010 |   | 2009 |   | 2008 |   |
|   |                                                                                                              |   |   |   |   |   |   |   |   |   |   |
|   | Total Net Economic Earnings above                                                                                 |   | $ | 39,816 |   | $ | 33,078 |   | $ | 39,206 |   |
|   |   Add: Unrealized gain (loss) on energy-related    derivative contracts, net of tax |   |   | (91 | ) |   | 105 |   |   | — |   |
|   | Net Income                                                                                                        |   | $ | 39,725 |   | $ | 33,183 |   | $ | 39,206 |   |

| 12. | COMMITMENTS AND CONTINGENCIES |
|-----|-------------------------------|

| 13. | INTERIM FINANCIAL INFORMATION (UNAUDITED) |
|-----|-------------------------------------------|

|  (Thousands)        |   |   |         |   |    |   |   |   |   |     |   |   |   |   |    |   |   |   |   |     |   |
|--------------------------|--------|--------|--------------|--------|---------|--------|--------|--------|--------|----------|--------|--------|--------|--------|---------|--------|--------|--------|--------|----------|--------|
| Three Months Ended       |   |   |    |   | Dec. 31 |   |   |   |   | March 31 |   |   |   |   | June 30 |   |   |   |   | Sept. 30 |   |
|                     |   |   |         |   |    |   |   |   |   |     |   |   |   |   |    |   |   |   |   |     |   |
| Fiscal Year 2010         |   |   |         |   |    |   |   |   |   |     |   |   |   |   |    |   |   |   |   |     |   |
| Total Operating Revenues |   |   |         | $      | 293,254 |   |   |   | $      | 373,521  |   |   |   | $      | 124,746 |   |   |   | $      | 83,103   |   |
| Operating Income (Loss)  |   |   |         |   | 37,702  |   |   |   |   | 42,852   |   |   |   |   | 5,589   |   |   |   |   | (3,985   | )      |
| Net Income (Loss)        |   |   |         |   | 21,066  |   |   |   |   | 23,416   |   |   |   |   | 24      |   |   |   |   | (4,781   | )      |
|                     |   |   |         |   |    |   |   |   |   |     |   |   |   |   |    |   |   |   |   |     |   |
|                     |   |   |         |   |    |   |   |   |   |     |   |   |   |   |    |   |   |   |   |     |   |
| Three Months Ended       |   |   |         |   | Dec. 31 |   |   |   |   | March 31 |   |   |   |   | June 30 |   |   |   |   | Sept. 30 |   |
|                     |   |   |         |   |    |   |   |   |   |     |   |   |   |   |    |   |   |   |   |     |   |
| Fiscal Year 2009         |   |   |         |   |    |   |   |   |   |     |   |   |   |   |    |   |   |   |   |     |   |
| Total Operating Revenues |   |   |         | $      | 358,698 |   |   |   | $      | 441,067  |   |   |   | $      | 160,917 |   |   |   | $      | 95,557   |   |
| Operating Income (Loss)  |   |   |         |   | 32,959  |   |   |   |   | 42,068   |   |   |   |   | 8,951   |   |   |   |   | (9,711   | )      |
| Net Income (Loss)        |   |   |         |   | 16,197  |   |   |   |   | 22,186   |   |   |   |   | 2,347   |   |   |   |   | (7,547   | )      |