Common use of FAIR VALUE OF FINANCIAL INSTRUMENTS Clause in Contracts

FAIR VALUE OF FINANCIAL INSTRUMENTS. The following table presents the carrying amounts and estimated fair values of the company’s financial instruments at September 30, 2000 and 1999. The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties. (Millions) Carrying Amount Fair Value Current assets $ 147.4 $ 147.4 $ 116.9 $ 116.9 Current liabilities 349.9 349.9 286.5 286.5 Long-term debt 559.6 532.8 506.1 487.9 Financial instruments included in current assets consist of cash and cash equivalents, net accounts receivable, accrued utility revenues and other miscellaneous receivables. Financial instruments included in current liabilities consist of total current liabilities from the Consolidated Balance Sheets excluding capital lease obligations and accrued vacation costs. The carrying amount of the financial instruments included in current assets and current liabilities approximates fair value because of the short maturity of these instruments. The fair value of long-term debt was estimated based on the quoted market prices of U.S. Treasury issues having a similar term to maturity, adjusted for the company’s credit quality and the present value of future cash flows.

FAIR VALUE OF FINANCIAL INSTRUMENTS. The following table presents the carrying amounts and estimated fair values of the company’s financial instruments at September 30, 2000 and 1999. The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties. 2000 1999 (Millions) Carrying Amount Fair Value Carrying Amount Fair Value Current assets $ 147.4 $ 147.4 $ 116.9 $ 116.9 Current liabilities 349.9 349.9 286.5 286.5 Long-term debt 559.6 532.8 506.1 487.9 Financial instruments included in current assets consist of cash and cash equivalents, net accounts receivable, accrued utility revenues and other miscellaneous receivables. Financial instruments included in current liabilities consist of total current liabilities from the Consolidated Balance Sheets excluding capital lease obligations and accrued vacation costs. The carrying amount of the financial instruments included in current assets and current liabilities approximates fair value because of the short maturity of these instruments. The fair value of long-term debt was estimated based on the quoted market prices of U.S. Treasury issues having a similar term to maturity, adjusted for the company’s credit quality and the present value of future cash flows.