|
|
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|
|
[ X ]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended December 31, 2012
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from __________ to __________
|
Missouri
(State of Incorporation)
|
74-2976504
(I.R.S. Employer Identification number)
|
720 Olive Street
St. Louis, MO 63101
(Address and zip code of principal executive offices)
314-342-0500
(Registrant’s telephone number, including area code)
|
|
Large accelerated filer
|
[ X ]
|
|
Accelerated filer
|
[ ]
|
|
Non-accelerated filer
|
[ ]
|
|
Smaller reporting company
|
[ ]
|
|
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TABLE OF CONTENTS
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Page No.
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|
||
|
Three Months Ended December 31,
|
||||||
(Thousands, Except Per Share Amounts)
|
2012
|
|
2011
|
||||
Operating Revenues:
|
|
|
|
|
|||
Gas Utility
|
$
|
250,111
|
|
|
$
|
250,902
|
|
Gas Marketing
|
55,249
|
|
|
158,588
|
|
||
Other
|
1,643
|
|
|
1,423
|
|
||
Total Operating Revenues
|
307,003
|
|
|
410,913
|
|
||
Operating Expenses:
|
|
|
|
||||
Gas Utility
|
|
|
|
||||
Natural and propane gas
|
136,515
|
|
|
146,751
|
|
||
Other operation expenses
|
33,920
|
|
|
37,565
|
|
||
Maintenance
|
5,731
|
|
|
5,308
|
|
||
Depreciation and amortization
|
10,965
|
|
|
10,089
|
|
||
Taxes, other than income taxes
|
14,806
|
|
|
14,667
|
|
||
Total Gas Utility Operating Expenses
|
201,937
|
|
|
214,380
|
|
||
Gas Marketing
|
57,382
|
|
|
152,559
|
|
||
Other
|
5,599
|
|
|
869
|
|
||
Total Operating Expenses
|
264,918
|
|
|
367,808
|
|
||
Operating Income
|
42,085
|
|
|
43,105
|
|
||
Other Income and (Income Deductions) – Net
|
1,084
|
|
|
1,939
|
|
||
Interest Charges:
|
|
|
|
||||
Interest on long-term debt
|
5,438
|
|
|
5,739
|
|
||
Other interest charges
|
588
|
|
|
575
|
|
||
Total Interest Charges
|
6,026
|
|
|
6,314
|
|
||
Income Before Income Taxes
|
37,143
|
|
|
38,730
|
|
||
Income Tax Expense
|
11,575
|
|
|
13,556
|
|
||
Net Income
|
$
|
25,568
|
|
|
$
|
25,174
|
|
Weighted Average Number of Common Shares Outstanding:
|
|
|
|
||||
Basic
|
22,372
|
|
|
22,193
|
|
||
Diluted
|
22,434
|
|
|
22,263
|
|
||
Basic Earnings Per Share of Common Stock
|
$
|
1.14
|
|
|
$
|
1.13
|
|
Diluted Earnings Per Share of Common Stock
|
$
|
1.14
|
|
|
$
|
1.12
|
|
Dividends Declared Per Share of Common Stock
|
$
|
0.425
|
|
|
$
|
0.415
|
|
|
|
|
|
Three Months Ended December 31,
|
||||||
(Thousands)
|
2012
|
|
2011
|
||||
Net Income
|
$
|
25,568
|
|
|
$
|
25,174
|
|
Other Comprehensive Income (Loss), Before Tax:
|
|
|
|
||||
Net gains (losses) on cash flow hedging derivative instruments:
|
|
|
|
||||
Net hedging gain arising during the period
|
1,389
|
|
|
3,047
|
|
||
Reclassification adjustment for losses (gains) included in
|
|
|
|
||||
net income
|
2,249
|
|
|
(2,830
|
)
|
||
Net unrealized gains on cash flow hedging
|
|
|
|
||||
derivative instruments
|
3,638
|
|
|
217
|
|
||
Amortization of actuarial loss included in net periodic
|
|
|
|
||||
pension and postretirement benefit cost
|
90
|
|
|
91
|
|
||
Other Comprehensive Income, Before Tax
|
3,728
|
|
|
308
|
|
||
Income Tax Expense Related to Items of Other
|
|
|
|
||||
Comprehensive Income
|
1,450
|
|
|
119
|
|
||
Other Comprehensive Income, Net of Tax
|
2,278
|
|
|
189
|
|
||
Comprehensive Income
|
$
|
27,846
|
|
|
$
|
25,363
|
|
|
|
|
|
Dec. 31,
|
|
Sept. 30,
|
|
Dec. 31,
|
||||||
(Thousands)
|
2012
|
|
2012
|
|
2011
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Utility Plant
|
$
|
1,508,770
|
|
|
$
|
1,497,419
|
|
|
$
|
1,400,001
|
|
Less: Accumulated depreciation and amortization
|
470,840
|
|
|
478,120
|
|
|
463,148
|
|
|||
Net Utility Plant
|
1,037,930
|
|
|
1,019,299
|
|
|
936,853
|
|
|||
Non-utility property
|
5,788
|
|
|
6,039
|
|
|
4,449
|
|
|||
Other investments
|
51,631
|
|
|
50,775
|
|
|
52,508
|
|
|||
Other Property and Investments
|
57,419
|
|
|
56,814
|
|
|
56,957
|
|
|||
Current Assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
46,563
|
|
|
27,457
|
|
|
44,579
|
|
|||
Accounts receivable:
|
|
|
|
|
|
||||||
Utility
|
130,925
|
|
|
64,027
|
|
|
135,758
|
|
|||
Non-utility
|
54,092
|
|
|
51,042
|
|
|
49,902
|
|
|||
Other
|
17,822
|
|
|
26,478
|
|
|
17,554
|
|
|||
Allowance for doubtful accounts
|
(7,055
|
)
|
|
(7,705
|
)
|
|
(5,989
|
)
|
|||
Inventories:
|
|
|
|
|
|
||||||
Natural gas stored underground
|
88,342
|
|
|
92,729
|
|
|
113,668
|
|
|||
Propane gas
|
10,200
|
|
|
10,200
|
|
|
8,964
|
|
|||
Materials and supplies at average cost
|
4,257
|
|
|
3,543
|
|
|
4,855
|
|
|||
Natural gas receivable
|
13,746
|
|
|
22,377
|
|
|
15,327
|
|
|||
Derivative instrument assets
|
1,246
|
|
|
2,855
|
|
|
3,232
|
|
|||
Unamortized purchased gas adjustments
|
30,492
|
|
|
40,674
|
|
|
19,413
|
|
|||
Prepayments and other
|
9,433
|
|
|
9,339
|
|
|
8,250
|
|
|||
Total Current Assets
|
400,063
|
|
|
343,016
|
|
|
415,513
|
|
|||
Deferred Charges:
|
|
|
|
|
|
||||||
Regulatory assets
|
440,880
|
|
|
456,047
|
|
|
458,648
|
|
|||
Other
|
5,863
|
|
|
5,086
|
|
|
6,359
|
|
|||
Total Deferred Charges
|
446,743
|
|
|
461,133
|
|
|
465,007
|
|
|||
Total Assets
|
$
|
1,942,155
|
|
|
$
|
1,880,262
|
|
|
$
|
1,874,330
|
|
|
Dec. 31,
|
|
Sept. 30,
|
|
Dec. 31,
|
||||||
(Thousands, except share amounts)
|
2012
|
|
2012
|
|
2011
|
||||||
CAPITALIZATION AND LIABILITIES
|
|
|
|
|
|
||||||
Capitalization:
|
|
|
|
|
|
||||||
Common stock (70,000,000 shares authorized, 22,563,958,
22,539,431, and 22,478,635 shares issued, respectively)
|
$
|
22,564
|
|
|
$
|
22,539
|
|
|
$
|
22,479
|
|
Paid-in capital
|
169,496
|
|
|
168,607
|
|
|
163,944
|
|
|||
Retained earnings
|
430,556
|
|
|
414,581
|
|
|
405,158
|
|
|||
Accumulated other comprehensive loss
|
(1,838
|
)
|
|
(4,116
|
)
|
|
(1,911
|
)
|
|||
Total Common Stock Equity
|
620,778
|
|
|
601,611
|
|
|
589,670
|
|
|||
Long-term debt (less current portion)
|
364,426
|
|
|
339,416
|
|
|
339,372
|
|
|||
Total Capitalization
|
985,204
|
|
|
941,027
|
|
|
929,042
|
|
|||
Current Liabilities:
|
|
|
|
|
|
||||||
Notes payable
|
83,050
|
|
|
40,100
|
|
|
113,000
|
|
|||
Accounts payable
|
100,994
|
|
|
89,503
|
|
|
94,313
|
|
|||
Advance customer billings
|
15,950
|
|
|
25,146
|
|
|
11,600
|
|
|||
Current portion of long-term debt
|
—
|
|
|
25,000
|
|
|
25,000
|
|
|||
Wages and compensation accrued
|
12,401
|
|
|
13,908
|
|
|
12,529
|
|
|||
Dividends payable
|
9,931
|
|
|
9,831
|
|
|
9,626
|
|
|||
Customer deposits
|
8,437
|
|
|
8,565
|
|
|
10,080
|
|
|||
Interest accrued
|
5,034
|
|
|
8,590
|
|
|
5,519
|
|
|||
Taxes accrued
|
13,196
|
|
|
11,304
|
|
|
11,694
|
|
|||
Deferred income taxes
|
4,426
|
|
|
6,675
|
|
|
7,516
|
|
|||
Other
|
21,651
|
|
|
13,502
|
|
|
22,302
|
|
|||
Total Current Liabilities
|
275,070
|
|
|
252,124
|
|
|
323,179
|
|
|||
Deferred Credits and Other Liabilities:
|
|
|
|
|
|
||||||
Deferred income taxes
|
350,738
|
|
|
355,509
|
|
|
335,255
|
|
|||
Unamortized investment tax credits
|
3,060
|
|
|
3,113
|
|
|
3,272
|
|
|||
Pension and postretirement benefit costs
|
195,259
|
|
|
196,558
|
|
|
172,791
|
|
|||
Asset retirement obligations
|
40,936
|
|
|
40,368
|
|
|
27,904
|
|
|||
Regulatory liabilities
|
56,776
|
|
|
56,319
|
|
|
51,904
|
|
|||
Other
|
35,112
|
|
|
35,244
|
|
|
30,983
|
|
|||
Total Deferred Credits and Other Liabilities
|
681,881
|
|
|
687,111
|
|
|
622,109
|
|
|||
Commitments and Contingencies (
Note 11
)
|
|
|
|
|
|
||||||
Total Capitalization and Liabilities
|
$
|
1,942,155
|
|
|
$
|
1,880,262
|
|
|
$
|
1,874,330
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
||||||
(Thousands)
|
2012
|
|
2011
|
||||
Operating Activities:
|
|
|
|
||||
Net Income
|
$
|
25,568
|
|
|
$
|
25,174
|
|
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
|
|
|
|
||||
Depreciation, amortization, and accretion
|
11,314
|
|
|
10,239
|
|
||
Deferred income taxes and investment tax credits
|
2,572
|
|
|
7,940
|
|
||
Other – net
|
670
|
|
|
(251
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable – net
|
(61,942
|
)
|
|
(72,742
|
)
|
||
Unamortized purchased gas adjustments
|
10,182
|
|
|
6,306
|
|
||
Deferred purchased gas costs
|
2,266
|
|
|
(26,415
|
)
|
||
Accounts payable
|
12,004
|
|
|
(224
|
)
|
||
Advance customer billings — net
|
(9,196
|
)
|
|
(3,630
|
)
|
||
Taxes accrued
|
1,877
|
|
|
(805
|
)
|
||
Natural gas stored underground
|
4,387
|
|
|
1,502
|
|
||
Other assets and liabilities
|
4,213
|
|
|
2,807
|
|
||
Net cash provided by (used in) operating activities
|
3,915
|
|
|
(50,099
|
)
|
||
Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(27,713
|
)
|
|
(18,334
|
)
|
||
Other investments
|
(990
|
)
|
|
(280
|
)
|
||
Net cash used in investing activities
|
(28,703
|
)
|
|
(18,614
|
)
|
||
Financing Activities:
|
|
|
|
||||
Issuance of long-term debt
|
25,000
|
|
|
—
|
|
||
Maturity of first mortgage bonds
|
(25,000
|
)
|
|
—
|
|
||
Issuance of short-term debt – net
|
42,950
|
|
|
67,000
|
|
||
Changes in book overdrafts
|
10,160
|
|
|
11,842
|
|
||
Issuance of common stock
|
761
|
|
|
1,253
|
|
||
Dividends paid
|
(9,495
|
)
|
|
(9,035
|
)
|
||
Employees’ taxes paid associated with restricted shares withheld upon vesting
|
(723
|
)
|
|
(1,165
|
)
|
||
Excess tax benefits from stock-based compensation
|
256
|
|
|
134
|
|
||
Other
|
(15
|
)
|
|
(14
|
)
|
||
Net cash provided by financing activities
|
43,894
|
|
|
70,015
|
|
||
Net Increase in Cash and Cash Equivalents
|
19,106
|
|
|
1,302
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
27,457
|
|
|
43,277
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
46,563
|
|
|
$
|
44,579
|
|
Supplemental Disclosure of Cash Paid During the Period for:
|
|
|
|
||||
Interest
|
$
|
9,585
|
|
|
$
|
9,590
|
|
Income taxes
|
456
|
|
|
1,161
|
|
||
|
|
|
|
Three Months Ended December 31,
|
|
||||||
(Thousands)
|
2012
|
|
2011
|
|
||||
Service cost – benefits earned during the period
|
$
|
2,311
|
|
|
$
|
2,312
|
|
|
Interest cost on projected benefit obligation
|
4,066
|
|
|
4,871
|
|
|
||
Expected return on plan assets
|
(4,741
|
)
|
|
(4,899
|
)
|
|
||
Amortization of prior service cost
|
136
|
|
|
148
|
|
|
||
Amortization of actuarial loss
|
2,839
|
|
|
2,277
|
|
|
||
Sub-total
|
4,611
|
|
|
4,709
|
|
|
||
Regulatory adjustment
|
(434
|
)
|
|
(483
|
)
|
|
||
Net pension cost
|
$
|
4,177
|
|
|
$
|
4,226
|
|
|
|
Three Months Ended
December 31,
|
|
||||||
(Thousands)
|
2012
|
|
2011
|
|
||||
Service cost – benefits earned during the period
|
$
|
2,533
|
|
|
$
|
2,015
|
|
|
Interest cost on accumulated
postretirement benefit obligation
|
1,279
|
|
|
1,380
|
|
|
||
Expected return on plan assets
|
(1,081
|
)
|
|
(991
|
)
|
|
||
Amortization of transition obligation
|
23
|
|
|
34
|
|
|
||
Amortization of prior service cost (credit)
|
1
|
|
|
(518
|
)
|
|
||
Amortization of actuarial loss
|
1,325
|
|
|
1,065
|
|
|
||
Sub-total
|
4,080
|
|
|
2,985
|
|
|
||
Regulatory adjustment
|
(1,699
|
)
|
|
(604
|
)
|
|
||
Net postretirement benefit cost
|
$
|
2,381
|
|
|
$
|
2,381
|
|
|
|
Restricted Stock/
Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Nonvested at September 30, 2012
|
232,403
|
|
|
$
|
30.89
|
|
Granted (maximum shares that can be earned)
|
108,419
|
|
|
$
|
34.48
|
|
Vested
|
(37,436
|
)
|
|
$
|
27.02
|
|
Forfeited
|
(40,563
|
)
|
|
$
|
23.95
|
|
Nonvested at December 31, 2012
|
262,823
|
|
|
$
|
34.00
|
|
|
Restricted Stock/
Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Nonvested at September 30, 2012
|
115,115
|
|
|
$
|
36.54
|
|
Granted
|
39,674
|
|
|
$
|
39.96
|
|
Vested
|
(19,800
|
)
|
|
$
|
30.38
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Nonvested at December 31, 2012
|
134,989
|
|
|
$
|
38.45
|
|
|
Stock
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
|
Aggregate
Intrinsic
Value
($000)
|
|||||
Outstanding at September 30, 2012
|
214,000
|
|
|
$
|
31.02
|
|
|
|
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
(2,000
|
)
|
|
$
|
34.95
|
|
|
|
|
|
||
Forfeited
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Expired
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Outstanding at December 31, 2012
|
212,000
|
|
|
$
|
30.99
|
|
|
2.1
|
|
$
|
1,616
|
|
Fully Vested and Expected to Vest at December 31, 2012
|
212,000
|
|
|
$
|
30.99
|
|
|
2.1
|
|
$
|
1,616
|
|
Exercisable at December 31, 2012
|
212,000
|
|
|
$
|
30.99
|
|
|
2.1
|
|
$
|
1,616
|
|
|
Three Months Ended
December 31,
|
|
||||||
(Thousands)
|
2012
|
|
2011
|
|
||||
Total equity compensation cost
|
$
|
622
|
|
|
$
|
667
|
|
|
Compensation cost capitalized
|
(183
|
)
|
|
(138
|
)
|
|
||
Compensation cost recognized in net income
|
439
|
|
|
529
|
|
|
||
Income tax benefit recognized in net income
|
(169
|
)
|
|
(204
|
)
|
|
||
Compensation cost recognized in net income, net of income tax
|
$
|
270
|
|
|
$
|
325
|
|
|
|
Three Months Ended
December 31,
|
|
||||||
(Thousands, Except Per Share Amounts)
|
2012
|
|
2011
|
|
||||
Basic EPS:
|
|
|
|
|
||||
Net Income
|
$
|
25,568
|
|
|
$
|
25,174
|
|
|
Less: Income allocated to participating securities
|
80
|
|
|
155
|
|
|
||
Net Income Available to Common Shareholders
|
$
|
25,488
|
|
|
$
|
25,019
|
|
|
|
|
|
|
|
||||
Weighted Average Shares Outstanding
|
22,372
|
|
|
22,193
|
|
|
||
Earnings Per Share of Common Stock
|
$
|
1.14
|
|
|
$
|
1.13
|
|
|
|
|
|
|
|
||||
Diluted EPS:
|
|
|
|
|
||||
Net Income
|
$
|
25,568
|
|
|
$
|
25,174
|
|
|
Less: Income allocated to participating securities
|
80
|
|
|
155
|
|
|
||
Net Income Available to Common Shareholders
|
$
|
25,488
|
|
|
$
|
25,019
|
|
|
|
|
|
|
|
||||
Weighted Average Shares Outstanding
|
22,372
|
|
|
22,193
|
|
|
||
Dilutive Effect of Stock Options, Restricted Stock,
|
|
|
|
|
||||
and Restricted Stock Units
|
62
|
|
|
70
|
|
|
||
Weighted Average Diluted Shares
|
22,434
|
|
|
22,263
|
|
|
||
Earnings Per Share of Common Stock
|
$
|
1.14
|
|
|
$
|
1.12
|
|
|
Outstanding Shares Excluded from the
|
|
|
|
|
||||
Calculation of Diluted EPS Attributable to:
|
|
|
|
|
||||
Restricted stock and stock units subject to
|
|
|
|
|
||||
performance and/or market conditions
|
263
|
|
|
278
|
|
|
|
|
|
|
|
Classification of Estimated Fair Value (a)
|
||||||||||||||
(Thousands)
|
Carrying
Amount
|
|
Fair
Value
|
|
Quoted
Prices in Active Markets
(Level 1)
|
|
Significant Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||
As of December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
46,563
|
|
|
$
|
46,563
|
|
|
$
|
36,487
|
|
|
$
|
10,076
|
|
|
$
|
—
|
|
Short-term debt
|
83,050
|
|
|
83,050
|
|
|
—
|
|
|
83,050
|
|
|
—
|
|
|||||
Long-term debt
|
364,426
|
|
|
456,235
|
|
|
—
|
|
|
456,235
|
|
|
—
|
|
|||||
As of September 30, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
27,457
|
|
|
$
|
27,457
|
|
|
$
|
17,380
|
|
|
$
|
10,077
|
|
|
$
|
—
|
|
Short-term debt
|
40,100
|
|
|
40,100
|
|
|
—
|
|
|
40,100
|
|
|
—
|
|
|||||
Long-term debt, including current portion
|
364,416
|
|
|
452,768
|
|
|
—
|
|
|
452,768
|
|
|
—
|
|
|||||
As of December 31, 2011
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
44,579
|
|
|
$
|
44,579
|
|
|
|
|
|
|
|
||||||
Short-term debt
|
113,000
|
|
|
113,000
|
|
|
|
|
|
|
|
||||||||
Long-term debt, including current portion
|
364,372
|
|
|
449,968
|
|
|
|
|
|
|
|
||||||||
(a) The Company adopted the provisions of ASU 2011-04 (ASC Topic 820) in the second quarter of fiscal year 2012 on a prospective basis. Accordingly, disclosures for prior periods are not required to be presented.
|
(Thousands)
|
Quoted
Prices in
Active
Markets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Effects of Netting and Cash Margin Receivables
/Payables
|
|
Total
|
||||||||||
As of December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U. S. Stock/Bond Mutual Funds
|
$
|
13,146
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,146
|
|
NYMEX/ICE natural gas contracts
|
2,497
|
|
|
749
|
|
|
—
|
|
|
(2,962
|
)
|
|
284
|
|
|||||
NYMEX gasoline and heating
|
|
|
|
|
|
|
|
|
|
||||||||||
oil contracts
|
281
|
|
|
—
|
|
|
—
|
|
|
(281
|
)
|
|
—
|
|
|||||
Natural gas commodity contracts
|
—
|
|
|
1,228
|
|
|
77
|
|
|
(348
|
)
|
|
957
|
|
|||||
Total
|
$
|
15,924
|
|
|
$
|
1,977
|
|
|
$
|
77
|
|
|
$
|
(3,591
|
)
|
|
$
|
14,387
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
NYMEX/ICE natural gas contracts
|
$
|
6,650
|
|
|
$
|
749
|
|
|
$
|
—
|
|
|
$
|
(7,399
|
)
|
|
$
|
—
|
|
Natural gas commodity contracts
|
—
|
|
|
1,132
|
|
|
47
|
|
|
(348
|
)
|
|
831
|
|
|||||
Total
|
$
|
6,650
|
|
|
$
|
1,881
|
|
|
$
|
47
|
|
|
$
|
(7,747
|
)
|
|
$
|
831
|
|
As of September 30, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U. S. Stock/Bond Mutual Funds
|
$
|
13,187
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,187
|
|
NYMEX/ICE natural gas contracts
|
7,411
|
|
|
994
|
|
|
—
|
|
|
(8,405
|
)
|
|
—
|
|
|||||
NYMEX gasoline and heating
|
|
|
|
|
|
|
|
|
|
||||||||||
oil contracts
|
344
|
|
|
—
|
|
|
—
|
|
|
(344
|
)
|
|
—
|
|
|||||
Natural gas commodity contracts
|
—
|
|
|
3,060
|
|
|
113
|
|
|
(299
|
)
|
|
2,874
|
|
|||||
Total
|
$
|
20,942
|
|
|
$
|
4,054
|
|
|
$
|
113
|
|
|
$
|
(9,048
|
)
|
|
$
|
16,061
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
NYMEX/ICE natural gas contracts
|
$
|
12,253
|
|
|
$
|
1,891
|
|
|
$
|
—
|
|
|
$
|
(14,144
|
)
|
|
$
|
—
|
|
Natural gas commodity contracts
|
—
|
|
|
428
|
|
|
4
|
|
|
(299
|
)
|
|
133
|
|
|||||
Total
|
$
|
12,253
|
|
|
$
|
2,319
|
|
|
$
|
4
|
|
|
$
|
(14,443
|
)
|
|
$
|
133
|
|
As of December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U. S. Stock/Bond Mutual Funds
|
$
|
15,916
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,916
|
|
NYMEX/ICE natural gas contracts
|
1,957
|
|
|
1,724
|
|
|
—
|
|
|
(2,180
|
)
|
|
1,501
|
|
|||||
NYMEX gasoline and heating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
oil contracts
|
31
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|||||
Natural gas commodity contracts
|
—
|
|
|
2,111
|
|
|
117
|
|
|
(99
|
)
|
|
2,129
|
|
|||||
Total
|
$
|
17,904
|
|
|
$
|
3,835
|
|
|
$
|
117
|
|
|
$
|
(2,310
|
)
|
|
$
|
19,546
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
NYMEX/ICE natural gas contracts
|
$
|
27,122
|
|
|
$
|
1,400
|
|
|
$
|
—
|
|
|
$
|
(28,522
|
)
|
|
$
|
—
|
|
Natural gas commodity contracts
|
—
|
|
|
67
|
|
|
80
|
|
|
(99
|
)
|
|
48
|
|
|||||
Total
|
$
|
27,122
|
|
|
$
|
1,467
|
|
|
$
|
80
|
|
|
$
|
(28,621
|
)
|
|
$
|
48
|
|
|
Three Months Ended
December 31,
|
|
||||||
(Thousands)
|
2012
|
|
2011
|
|
||||
Beginning of period
|
$
|
109
|
|
|
$
|
13
|
|
|
Settlements
|
(66
|
)
|
|
34
|
|
|
||
Net gains related to derivatives still held
at end of period
|
(13
|
)
|
|
(10
|
)
|
|
||
End of period
|
$
|
30
|
|
|
$
|
37
|
|
|
|
Laclede Gas Company
|
|
Laclede Energy
Resources, Inc.
|
||||||||||
|
MMBtu
(millions)
|
|
Avg. Price
Per
MMBtu
|
|
MMBtu
(millions)
|
|
Avg. Price
Per
MMBtu
|
||||||
Open short futures positions
|
|
|
|
|
|
|
|
||||||
Fiscal 2013
|
—
|
|
|
$
|
—
|
|
|
6.62
|
|
|
$
|
3.58
|
|
Fiscal 2014
|
—
|
|
|
—
|
|
|
0.25
|
|
|
3.85
|
|
||
Open long futures positions
|
|
|
|
|
|
|
|
||||||
Fiscal 2013
|
13.48
|
|
|
$
|
3.78
|
|
|
2.02
|
|
|
$
|
3.80
|
|
Fiscal 2014
|
4.87
|
|
|
3.97
|
|
|
0.55
|
|
|
3.99
|
|
The Effect of Derivative Instruments on the Statements of Consolidated Income and Statements of Consolidated Comprehensive Income
|
|||||||||
|
|
Three Months Ended
|
|
||||||
|
Location of Gain (Loss)
|
December 31,
|
|
||||||
(Thousands)
|
Recorded in Income
|
2012
|
|
2011
|
|
||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|||||
Effective portion of gain (loss) recognized in OCI on derivatives:
|
|
|
|
|
|||||
NYMEX/ICE natural gas contracts
|
|
$
|
1,332
|
|
|
$
|
2,997
|
|
|
NYMEX gasoline and heating oil contracts
|
|
57
|
|
|
50
|
|
|
||
Total
|
|
$
|
1,389
|
|
|
$
|
3,047
|
|
|
Effective portion of gain (loss) reclassified from AOCI to income:
|
|
|
|
|
|||||
NYMEX/ICE natural gas contracts
|
Gas Marketing Operating Revenues
|
$
|
(1,962
|
)
|
|
$
|
6,740
|
|
|
|
Gas Marketing Operating Expenses
|
(334
|
)
|
|
(3,924
|
)
|
|
||
Sub-total
|
|
(2,296
|
)
|
|
2,816
|
|
|
||
NYMEX gasoline and heating oil contracts
|
Other Gas Utility Operating Expenses
|
47
|
|
|
14
|
|
|
||
Total
|
|
$
|
(2,249
|
)
|
|
$
|
2,830
|
|
|
Ineffective portion of gain (loss) on derivatives recognized in income:
|
|
|
|
|
|||||
NYMEX/ICE natural gas contracts
|
Gas Marketing Operating Revenues
|
$
|
(325
|
)
|
|
$
|
19
|
|
|
|
Gas Marketing Operating Expenses
|
(85
|
)
|
|
(106
|
)
|
|
||
Sub-total
|
|
(410
|
)
|
|
(87
|
)
|
|
||
NYMEX gasoline and heating oil contracts
|
Other Gas Utility Operating Expenses
|
(101
|
)
|
|
6
|
|
|
||
Total
|
|
$
|
(511
|
)
|
|
$
|
(81
|
)
|
|
Derivatives Not Designated as Hedging Instruments *
|
|
|
|
|
|||||
Gain (loss) recognized in income on derivatives:
|
|
|
|
|
|||||
Natural gas commodity contracts
|
Gas Marketing Operating Revenues
|
$
|
(970
|
)
|
|
$
|
(767
|
)
|
|
|
Gas Marketing Operating Expenses
|
—
|
|
|
687
|
|
|
||
NYMEX/ICE natural gas contracts
|
Gas Marketing Operating Revenues
|
1,067
|
|
|
70
|
|
|
||
NYMEX gasoline and heating oil contracts
|
Other Income and (Income Deductions) - Net
|
33
|
|
|
1
|
|
|
||
Total
|
|
$
|
130
|
|
|
$
|
(9
|
)
|
|
*
|
Gains and losses on Laclede Gas’ natural gas derivative instruments, which are not designated as hedging instruments for financial reporting purposes, are deferred pursuant to the Utility’s PGA Clause and initially 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 Consolidated Income. Such amounts are recognized in the Statements of Consolidated Income as a component of Gas Utility Natural and Propane Gas operating expenses when they are recovered through the PGA Clause and reflected in customer billings.
|
*
|
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 Consolidated Balance Sheets. As such, the gross balances presented in the table above are not indicative of the Company’s net economic exposure. Refer to
, Fair Value Measurements, for information on the valuation of derivative instruments.
|
|
(Thousands)
|
Dec. 31,
2012
|
|
|
Sept. 30,
2012
|
|
|
Dec. 31,
2011
|
|
|||
|
Fair value of asset of derivatives presented above
|
$
|
4,832
|
|
|
$
|
11,922
|
|
|
$
|
5,941
|
|
|
Fair value of cash margin receivables offset with derivatives
|
4,186
|
|
|
5,478
|
|
|
26,310
|
|
|||
|
Netting of assets and liabilities with the same counterparty
|
(7,778
|
)
|
|
(14,526
|
)
|
|
(28,621
|
)
|
|||
|
Total
|
$
|
1,240
|
|
|
$
|
2,874
|
|
|
$
|
3,630
|
|
|
|
|
|
|
|
|
||||||
|
Derivative Instrument Assets, per Consolidated Balance Sheets:
|
|
|
|
|
|
||||||
|
Derivative instrument assets
|
$
|
1,246
|
|
|
$
|
2,855
|
|
|
$
|
3,232
|
|
|
Other deferred charges
|
(6
|
)
|
|
19
|
|
|
398
|
|
|||
|
Total
|
$
|
1,240
|
|
|
$
|
2,874
|
|
|
$
|
3,630
|
|
|
|
|
|
|
|
|
||||||
|
Fair value of liability derivatives presented above
|
$
|
8,578
|
|
|
$
|
14,576
|
|
|
$
|
28,669
|
|
|
Fair value of cash margin payables offset with derivatives
|
31
|
|
|
83
|
|
|
—
|
|
|||
|
Netting of assets and liabilities with the same counterparty
|
(7,778
|
)
|
|
(14,526
|
)
|
|
(28,621
|
)
|
|||
|
Derivative instrument liabilities, per Consolidated Balance Sheets*
|
$
|
831
|
|
|
$
|
133
|
|
|
$
|
48
|
|
|
Three Months Ended
December 31,
|
|
||||||
(Thousands)
|
2012
|
|
2011
|
|
||||
Interest income
|
$
|
406
|
|
|
$
|
348
|
|
|
Net investment (loss) gain
|
(70
|
)
|
|
1,030
|
|
|
||
Other income
|
68
|
|
|
—
|
|
|
||
Other income deductions
|
680
|
|
|
561
|
|
|
||
Other Income and (Income Deductions) – Net
|
$
|
1,084
|
|
|
$
|
1,939
|
|
|
|
|
Gas
|
|
Unallocated and
|
|
||||||||||
(Thousands)
|
Gas Utility
|
Marketing
|
Other
|
Eliminations
|
Consolidated
|
||||||||||
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues from external customers
|
$
|
250,111
|
|
$
|
55,249
|
|
$
|
1,643
|
|
$
|
—
|
|
$
|
307,003
|
|
Intersegment revenues
|
680
|
|
6,906
|
|
259
|
|
(7,845
|
)
|
—
|
|
|||||
Total Operating Revenues
|
250,791
|
|
62,155
|
|
1,902
|
|
(7,845
|
)
|
307,003
|
|
|||||
Net Economic Earnings
|
25,341
|
|
3,281
|
|
(389
|
)
|
—
|
|
28,233
|
|
|||||
Total assets
|
1,809,722
|
|
188,603
|
|
124,967
|
|
(181,137
|
)
|
1,942,155
|
|
|||||
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues from external customers
|
$
|
250,899
|
|
$
|
151,977
|
|
$
|
1,163
|
|
$
|
—
|
|
$
|
404,039
|
|
Intersegment revenues
|
3
|
|
6,611
|
|
260
|
|
—
|
|
6,874
|
|
|||||
Total Operating Revenues
|
250,902
|
|
158,588
|
|
1,423
|
|
—
|
|
410,913
|
|
|||||
Net Economic Earnings
|
21,079
|
|
3,439
|
|
375
|
|
—
|
|
24,893
|
|
|||||
Total assets
|
1,753,859
|
|
167,879
|
|
137,768
|
|
(185,176
|
)
|
1,874,330
|
|
•
|
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, including decisions by natural gas producers to reduce production or shut in producing natural gas wells, expiration of existing supply and transportation arrangements that are not replaced with contracts with similar terms and pricing, as well as other changes that impact supply for and access to the markets in which our subsidiaries transact business;
|
•
|
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
|
•
|
non-regulated and affiliate transactions
|
•
|
franchise renewals
|
•
|
environmental or safety matters, including the potential impact of legislative and regulatory actions related to climate change and pipeline safety
|
•
|
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.
|
•
|
With a larger market capitalization and enterprise value, the Company expects to have improved trading liquidity and better access to the capital markets. It plans to be able to support growth initiatives in new markets with new customers.
|
•
|
Laclede Group will serve Missouri's two largest metropolitan areas in a state where it already has a working relationship with regulators.
|
•
|
The Transaction is expected to be neutral to Laclede Group's earnings per share in the first full year following closing and accretive thereafter. The Transaction is expected to be immediately accretive to cash flow.
|
•
|
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.
|
•
|
the risks of competition;
|
•
|
fluctuations in natural gas prices;
|
•
|
new national pipeline infrastructure projects;
|
•
|
the ability to procure firm transportation and storage services at reasonable rates;
|
•
|
credit and/or capital market access;
|
•
|
counterparty risks;
|
•
|
the effect of natural gas price volatility on the business; and,
|
•
|
additional growth.
|
•
|
Net unrealized gains and losses on energy-related derivatives that are required by GAAP fair value accounting associated with current changes in the fair value of financial and physical transactions prior to their completion and settlement. These unrealized gains and losses result primarily from two sources:
|
1)
|
changes in the fair values of physical and/or financial derivatives prior to the period of settlement; and,
|
2)
|
ineffective portions of accounting hedges, required to be recorded in earnings prior to settlement, due to differences in commodity price changes between the locations of the forecasted physical purchase or sale transactions and the locations of the underlying hedge instruments;
|
•
|
Lower of cost or market adjustments to the carrying value of commodity inventories resulting when the market price of the commodity falls below its original cost, to the extent that those commodities are economically hedged; and
|
•
|
Realized gains and losses resulting from the settlement of economic hedges prior to the sale of the physical commodity.
|
*
|
Amounts presented net of income taxes. Income taxes are calculated by applying federal, state, and local income tax rates applicable to ordinary income to the amounts of the pre-tax reconciling items. For the quarters ended December 31, 2012 and 2011, the total net amount of income tax (benefit) expense included in the reconciling items above is ($1.6) million and $0.2 million, respectively.
|
**
|
Net economic earnings per share is calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted earnings per share calculation.
|
•
|
decreases in operation and maintenance expenses totaling $3.2 million;
|
•
|
higher Infrastructure System Replacement Surcharge (ISRS) revenues totaling $1.3 million; and
|
•
|
increased sales margins reflecting colder weather this fall totaling $1.1 million.
|
(Millions)
|
|
||
Higher system sales volumes and other variations
|
$
|
12.1
|
|
Lower wholesale gas costs passed on to Utility customers (subject to prudence review by the MoPSC)
|
(9.6
|
)
|
|
Lower off-system sales volumes (reflecting less favorable market conditions as described in greater
detail in the
Results of Operations - Overview
)
|
(6.1
|
)
|
|
Higher prices charged for off-system sales
|
1.5
|
|
|
Higher ISRS revenues
|
1.3
|
|
|
Total Variation
|
$
|
(0.8
|
)
|
•
|
Accounts receivable and allowance for doubtful accounts
|
•
|
Employee benefits and postretirement obligations
|
•
|
Regulated operations
|
•
|
Non-Regulated Gas Marketing Energy Contracts
|
|
Commercial Paper Borrowings
|
Three Months Ended December 31, 2012
|
|
Weighted average borrowings outstanding
|
$74.9 million
|
Weighted average interest rate
|
0.3%
|
Range of borrowings outstanding
|
$40.4 - $99.4 million
|
|
|
As of December 31, 2012
|
|
Borrowings outstanding at end of period
|
$83.1 million
|
Weighted average interest rate
|
0.3%
|
|
|
Payments due by period
|
|||||||||||||||||
Contractual Obligations
|
Total
|
|
Remaining Fiscal Year
2013
|
|
Fiscal Years
2014-2015
|
|
Fiscal Years
2016-2017
|
|
Fiscal Years 2018 and
thereafter
|
||||||||||
Principal Payments on Long-Term Debt (a)
|
$
|
465.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
465.0
|
|
Interest Payments on Long-Term Debt (a)
|
476.9
|
|
|
15.1
|
|
|
50.7
|
|
|
50.7
|
|
|
360.4
|
|
|||||
Capital Leases (b)
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|||||
Operating Leases (b)
|
9.1
|
|
|
3.3
|
|
|
5.5
|
|
|
0.3
|
|
|
—
|
|
|||||
Purchase Obligations – Natural Gas (c)
|
387.2
|
|
|
275.0
|
|
|
92.0
|
|
|
19.4
|
|
|
0.8
|
|
|||||
Purchase Obligations – Other (d)
|
81.0
|
|
|
19.9
|
|
|
22.2
|
|
|
18.3
|
|
|
20.6
|
|
|||||
Total (e) (f)
|
$
|
1,419.4
|
|
|
$
|
313.4
|
|
|
$
|
170.5
|
|
|
$
|
88.7
|
|
|
$
|
846.8
|
|
(a)
|
The principal and interest payments on long-term debt included in the table above include obligations associated with Laclede Gas’ commitment to issue $100 million of first mortgage bonds in private placements scheduled for settlement in March 2013. Of this $100 million, $55 million will be issued at 3.00% for a 10-year term, and $45 million will be issued at 3.40% for a 15-year term. Refer to
Long-term Debt, Equity, and Shelf Registrations
on page 36 for additional information.
|
(b)
|
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.
|
(c)
|
These purchase obligations represent the minimum payments required under existing natural gas transportation and storage contracts and natural gas supply agreements in the Gas Utility and Gas Marketing segments. These amounts reflect fixed obligations as well as obligations to purchase natural gas at future market prices, calculated using December 31, 2012 forward market 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.
|
(d)
|
These purchase obligations primarily reflect miscellaneous agreements for the purchase of materials and the procurement of services necessary for normal operations.
|
(e)
|
The category of Other Long-Term Liabilities has been excluded from the table above because there are no material amounts of contractual obligations under this category. Long-term liabilities associated with unrecognized tax benefits, totaling $6.5 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. The Company expects to make contributions to its qualified, trusteed pension plans totaling $18.2 million during the remaining nine months of fiscal year 2013. Laclede Gas anticipates a $1.0 million contribution relative to its non-qualified pension plans during the remaining nine months of fiscal year 2013. With regard to the postretirement benefits, the Company anticipates Laclede Gas will contribute $16.3 million to the qualified trusts and $0.6 million directly to participants from Laclede Gas’ funds during the remaining nine months of fiscal year 2013. For further discussion of the Company’s pension and postretirement benefit plans, refer to
Note 2
, Pension Plans and Other Postretirement Benefits, of the Notes to Consolidated Financial Statements.
|
(f)
|
The table above does not include the Company's potential payment of a "reverse break up" fee of $73.1 million that would be due in the event that SUG terminates the MGE acquisition agreement as a result of the failure of Laclede Group to obtain financing. See
Note 12
, Acquisition Agreements, of the Notes to Consolidated Financial Statements for further details. Also, the table does not include any anticipated additional long-term debt to finance the acquisitions.
|
(Thousands)
|
Derivative
Fair
Values
|
|
Cash
Margin
|
|
Derivatives
and Cash
Margin
|
||||||
Net balance of derivative (liabilities) assets at September 30, 2012
|
$
|
(3,515
|
)
|
|
$
|
5,489
|
|
|
$
|
1,974
|
|
Changes in fair value
|
1,990
|
|
|
—
|
|
|
1,990
|
|
|||
Settlements/purchases - net
|
1,808
|
|
|
—
|
|
|
1,808
|
|
|||
Changes in cash margin
|
—
|
|
|
(4,653
|
)
|
|
(4,653
|
)
|
|||
Net balance of derivative assets at December 31, 2012
|
$
|
283
|
|
|
$
|
836
|
|
|
$
|
1,119
|
|
|
At December 31, 2012
|
|||||||||||
|
Maturity by Fiscal Year
|
|||||||||||
(Thousands)
|
Total
|
|
2013
|
|
2014
|
|
||||||
Fair values of exchange-traded/cleared natural gas derivatives - net
|
$
|
283
|
|
|
$
|
341
|
|
|
$
|
(58
|
)
|
|
MMBtu – net (short) long futures/swap/option positions
|
(4,295
|
)
|
|
(4,595
|
)
|
|
300
|
|
|
•
|
the Company's estimate of the costs to complete the acquisitions and the operating performance after the acquisitions close may vary significantly from actual results;
|
•
|
both before and after the closing of the acquisitions, the attention of management may be diverted to the acquisitions and subsequent integration of MGE and NEG rather than to current operations or the pursuit of other opportunities that could be beneficial to the Company;
|
•
|
the potential loss of key employees of the Company or of MGE or NEG who may be uncertain about their future roles if and when the acquisitions are completed; and
|
•
|
the trading price of Laclede Group's common stock may decline to the extent that the current market price reflects a market assumption that the transaction will be completed.
|
•
|
make it more difficult for Laclede Group to pay or refinance its debts as they become due during adverse economic and industry conditions;
|
•
|
limit the Company's flexibility to pursue other strategic opportunities or react to changes in its business and the industry in which it operates and, consequently, place it at a competitive disadvantage to competitors with less debt;
|
•
|
require an increased portion of the Company's cash flows from operations of Laclede Group and Laclede Gas to be used for debt service payments, thereby reducing the availability of its cash flow to fund working capital, capital expenditures, dividend payments and other general corporate purposes;
|
•
|
result in a downgrade in the credit rating of Laclede Group's or Laclede Gas' indebtedness, which could limit their ability to borrow additional funds or increase the interest rates applicable to their indebtedness;
|
•
|
result in higher interest expense in the event of increases in market interest rates for both long-term debt as well as short-term commercial paper or bank loans at variable rates;
|
•
|
reduce the amount of credit available to support hedging activities; and
|
•
|
require that additional terms, conditions or convenants be placed on the Company.
|
•
|
be dilutive to Laclede Group's existing shareholders and earnings per share;
|
•
|
impact the Company's capital structure and cost of the capital;
|
•
|
be adversely impacted by movements in the overall equity markets and/or the utility or natural gas utility industry sectors of that market, which could impact the offering price of the Company's new equity or necessitate the use of other equity or equity-like instruments such as preferred stock, convertible preferred shares, or convertible debt; and
|
•
|
impact Laclede Group's ability to meet its current and future dividend obligations.
|
Period
|
Total No. of Shares Purchases
|
Average Price Paid Per Share
|
Total No. of Shares Purchased as Part of Publicly Announced Plans
|
Maximum No. of Shares that May Yet be Purchased Under the Plans
|
October 1, 2012 – October 31, 2012
|
—
|
—
|
—
|
—
|
November 1, 2012 – November 30, 2012
|
18,590
|
$38.90
|
—
|
—
|
December 1, 2012 – December 31, 2012
|
—
|
—
|
—
|
—
|
Total
|
18,590
|
—
|
—
|
—
|
(a)
|
See
Exhibit Index
|
|
|
|
The Laclede Group, Inc.
|
||
|
|
|
|
||
Dated:
|
|
February 5, 2013
|
|
By:
|
/s/ Steven P. Rasche
|
|
|
|
|
|
Steven P. Rasche
|
|
|
|
|
|
Senior Vice President, Finance and Accounting
|
|
|
|
|
|
(Authorized Signatory and Principal Accounting Officer)
|
Exhibit No.
|
|
|
|
|
|
2.1*
|
-
|
Purchase and Sale Agreement for Missouri Gas Energy dated December 14, 2012;
|
|
|
filed as Exhibit 2.1 to the Company's Form 8-K filed December 17, 2012.
|
2.2*
|
-
|
Purchase and Sale Agreement for New England Gas Company dated December 14, 2012;
|
|
|
filed as Exhibit 2.2 to the Company's Form 8-K filed December 17, 2012.
|
2.3
|
-
|
Employee Agreement for Missouri Gas Energy dated December 14, 2012; filed as
|
|
|
Exhibit 2.3 to the Company's Form 8-K filed December 17, 2012.
|
2.4
|
-
|
Employee Agreement for New England Gas Company dated December 14, 2012; filed as
|
|
|
Exhibit 2.4 to the Company's Form 8-K filed December 17, 2012.
|
-
|
Form of Performance Contingent Restricted Stock Unit Award Agreement
|
|
10.2
|
-
|
First Amendment to Loan Agreement with Laclede Group, Inc. dated January 16, 2013;
|
|
|
filed as Exhibit 10.1 to the Company's Form 8-K filed January 18, 2013.
|
10.3
|
-
|
First Amendment to Loan Agreement with Laclede Gas Company dated January 16,
|
|
|
2013; filed as Exhibit 10.2 to the Company's Form 8-K filed January 18, 2013.
|
10.4
|
-
|
Commitment Letter dated December 14, 2012; filed as Exhibit 99.1 to the Company's
|
|
|
Form 8-K filed December 17, 2012.
|
10.5
|
-
|
Assignment and Assumption Agreement dated January 11, 2013; filed as Exhibit 99.1 to
|
|
|
the Company's Form 8-K filed January 14, 2013.
|
10.6
|
-
|
Consent dated January 11, 2013; filed as Exhibit 99.2 to the Company's Form 8-K filed
|
|
|
January 14, 2013.
|
-
|
Ratio of Earnings to Fixed Charges.
|
|
-
|
CEO and CFO Certifications under Exchange Act Rule 13a – 14(a).
|
|
-
|
CEO and CFO Section 1350 Certifications.
|
|
101.INS
|
-
|
XBRL Instance Document. (1)
|
101.SCH
|
-
|
XBRL Taxonomy Extension Schema. (1)
|
101.CAL
|
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XBRL Taxonomy Extension Calculation Linkbase. (1)
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101.DEF
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XBRL Taxonomy Definition Linkbase. (1)
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase. (1)
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase. (1)
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(1)
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Attached as Exhibit 101 to this Quarterly Report are the following documents formatted in extensible business reporting language (XBRL): (i) Document and Entity Information; (ii) unaudited Statements of Consolidated Income for the three months ended December 31, 2012 and 2011; (iii) unaudited Statements of Consolidated Comprehensive Income for the three months ended December 31, 2012 and 2011; (iv) unaudited Consolidated Balance Sheets at December 31, 2012, September 30, 2012 and December 31, 2011; (v) unaudited Statements of Consolidated Cash Flows for the three months ended December 31, 2012 and 2011, and (vi) Notes to the unaudited Consolidated Financial Statements. We also make available on our website the Interactive Data Files submitted as Exhibit 101 to this Quarterly Report.
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1.
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Performance Contingent Stock Unit Award
. Subject to the potential reduction as set forth in Section 5, and further subject to the other terms and conditions of this Agreement, the Units will become non-forfeitable (“Vested”) on
December 3, 2015
(Vesting Date), provided that (i) the Compensation Committee of the Company's Board of Directors (“Committee”) has certified that the Company has achieved Dividend Related Earnings (as defined in Appendix A) for the performance period from
October 1, 2012
through
September 30, 2015
(“Performance Period”) and (ii) the Participant is continuously employed by the Company until the Vesting Date.
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(a)
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Dividend Equivalents
. Any cash dividends declared before the Vesting Date on the shares of common stock underlying the Units (“Shares”) shall not be paid currently but shall be accumulated during the Performance Period for such Units (“Dividend Equivalents”) and become payable, if at all, on the Vesting Date. If all or a portion of the Units and shares of common stock underlying such Units are forfeited, the Dividend Equivalents relating to such forfeited Units and Shares shall also be forfeited. Dividend Equivalents shall be paid as provided below in Section 5 and shall not accrue any earnings or interest during the Performance Period.
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2.
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Award Date
. The Award Date of the Units awarded under this Agreement is
December 3, 2012
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3.
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Incorporation of Plan
. All terms, conditions and restrictions of the Plan are incorporated herein and made a part hereof as if stated herein. If there is any conflict between the terms and conditions of the Plan and
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4.
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Restrictions and Conditions
. Except as otherwise provided in this Agreement, Participant shall forfeit any and all right to the Units and related Dividend Equivalents if the Participant is terminated with or without cause or the Participant voluntarily terminates employment with the Company and its subsidiaries prior to the Vesting Date.
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5.
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Lapse of Restrictions
. The Participant accepts the award under this Agreement (“Award”) and agrees that the restrictions relative to such Award shall lapse only following the conclusion of the Performance Period and only to the extent that there are Dividend Related Earnings certified by the Committee. If there are no Dividend Related Earnings, the Units and related Dividend Equivalents shall be forfeited.
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(A)
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In the event of a Change in Control,
[target # of units]
of the Units and related Dividend Equivalents shall be deemed earned and prorated based on the number of months in the Performance Period to the date of the Change in Control, and the shares relative to such Units shall be issued and related Dividend
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(B)
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If a Participant leaves the employment of the Company and its subsidiaries due to death, disability or retirement (including early retirement and disability retirement) prior to the end of the Performance Period, the Participant will be eligible to earn a prorated Award (including Dividend Equivalents), as the Administrator in its sole discretion may determine, based on the number of full months as a Participant during the Performance Period and will be eligible to receive the Shares (and related Dividend Equivalents) to the extent certified by the Committee as provided in Section 5 above.
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6.
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How Dividend Equivalents Held
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Dividend Equivalents are intended to constitute an “unfunded” obligation of the Company and nothing in the Plan or this Agreement shall give the Participant any rights that are greater than those of a general unsecured creditor of the Company. All amounts accumulated on the Participant's behalf under this Agreement shall continue for all purposes to be part of the general assets of the Company.
Shares underlying the Units, when earned, shall be issued and delivered as provided in Section 5.
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7.
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Units Non-Transferable
. The Units (and any related Dividend Equivalents) shall not be transferable by Participant and may not be sold, assigned, disposed of, or pledged or hypothecated as collateral for a loan or as security for performance of any obligation or for any other purpose until after Shares underlying the Units have been issued and delivered to the Participant.
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8.
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No Right to Continued Employment
. Nothing in this Agreement shall confer on the Participant any right to continuance of employment by the Company or a subsidiary, nor shall it interfere in any way with the right of Participant's employer to terminate Participant's employment at any time.
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9.
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Tax Withholding and Tax Election
. The Company shall not be obligated to deliver any Shares underlying the Units until Participant pays to the Company in cash, or any other form of property acceptable to the Company, the amount required to be withheld for any federal, state or
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10.
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Confidential Information and Restrictions on Soliciting Employees.
Notwithstanding any provision of this Agreement to the contrary, the Participant shall pay to the Company the Fair Market Value of the Shares underlying the Units that vest and are issued to Participant under this Agreement if, during the period beginning on the date hereof and ending 18 months following the date the Participant's employment with the Company and its subsidiaries terminates (provided that such termination is other than a Change in Control Termination), the Participant: (1) discloses Confidential Information, as defined below, to any person not employed by the Company or any of its subsidiaries or not engaged to render services to the Company or any of its subsidiaries; or (2) Solicits Employees, as defined below. Fair Market Value shall be calculated on the date of the first violation of this Section 10.
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11.
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Integration.
This Agreement, and the other documents referred to herein or delivered pursuant hereto which form a part hereof, contains the entire understanding of the parties with respect to its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein. This Agreement, including without limitation the Plan, supersedes all prior agreements and understandings between the parties with respect to its subject matter and may only be amended by mutual written consent of the parties.
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12.
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Governing Law
. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Missouri, without regard to the provisions governing conflict of laws.
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13.
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Compliance with Laws and Regulations
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The obligations of the Company under this Agreement shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.
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14.
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Participant Acknowledgment
. By accepting the award under this Agreement, the Participant acknowledges receipt of a copy of the Plan, and acknowledges that all decisions, determinations and interpretations of the Administrator in respect of the Plan and this Agreement shall be final and conclusive. Participant acknowledges that this award is subject to the company's recoupment policy.
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The Laclede Group, Inc.
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By:
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Suzanne Sitherwood
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Title:
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President & Chief Executive Officer
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[Name]
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Threshold
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Target
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High Performance
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Level of Performance
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$X.XX/share
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X.XX/share
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$X.XX/share
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Units earned
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XXXX
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XXXX
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XXXX
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Threshold
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Target
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High Performance
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Level of Performance
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Investment of $XXX million
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Investment of $XXX million
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Investment of $XXX million
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Units earned
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XXXX
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XXXX
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XXXX
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Threshold
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Target
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High Performance
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Level of Performance
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TSR ≥ XXX percentile of peers
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TSR ≥ XXX percentile of peers
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TSR = XXX percentile of peers
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Units earned
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XXXX
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XXXX
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XXXX
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◦
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If performance on each of the Performance Metrics is below threshold, then no Units shall vest, and all Units and related Dividend Equivalents shall be forfeited.
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◦
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If performance on one or more of the Performance Metrics is achieved at or above Threshold, the number of Units that vest (and the amount of Dividend Equivalents that shall be payable) will equal the aggregate of Units earned under each Performance Metric.
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◦
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If performance on one or more of the Performance Metrics has been achieved between the Threshold and Target or Target and High Performance levels of performance, the Administrator shall interpolate for performance between the applicable levels and shall determine the number of Units that shall vest (and the amount of Dividend Equivalents that shall be payable).
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THE LACLEDE GROUP, INC. AND SUBSIDIARY COMPANIES
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SCHEDULE OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
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Twelve Months Ended
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Dec. 31,
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September 30,
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(Thousands of Dollars)
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2012
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2012
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2011
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2010
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2009
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2008
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Income from continuing
operations before interest
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charges and income taxes
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$
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112,000
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$
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113,875
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$
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118,424
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$
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107,986
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$
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126,517
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$
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113,228
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Add: One third of applicable
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rentals charged to operating
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expense (which approximates
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the interest factor)
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1,580
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1,591
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1,799
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1,825
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1,833
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1,691
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Total Earnings
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$
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113,580
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$
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115,466
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$
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120,223
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$
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109,811
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$
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128,350
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$
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114,919
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Interest on long-term debt
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$
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22,656
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$
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22,958
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$
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23,161
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$
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24,583
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$
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24,583
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$
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19,851
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Other interest
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2,002
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1,988
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2,256
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2,269
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5,163
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9,626
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Add: One third of applicable
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rentals charged to operating
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expense (which approximates
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the interest factor)
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1,580
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1,591
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1,799
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1,825
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1,833
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1,691
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Total Fixed Charges
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$
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26,238
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$
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26,537
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$
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27,216
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$
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28,677
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$
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31,579
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$
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31,168
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Ratio of Earnings to Fixed
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Charges
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4.33
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4.35
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4.42
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3.83
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4.06
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3.69
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1.
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I have reviewed this quarterly report on Form 10-Q of The Laclede Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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February 5, 2013
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Signature:
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/s/ Suzanne Sitherwood
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Suzanne Sitherwood
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of The Laclede Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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February 5, 2013
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Signature:
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/s/ Mark D. Waltermire
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Mark D. Waltermire
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Executive Vice President,
Chief Financial Officer
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(a)
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To the best of my knowledge, the accompanying report on Form 10-Q for the quarter ended
December 31, 2012
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
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(b)
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To the best of my knowledge, the information contained in the accompanying report on Form 10-Q for the quarter ended
December 31, 2012
fairly presents, in all material respects, the financial condition and results of operations of The Laclede Group, Inc.
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Date:
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February 5, 2013
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/s/ Suzanne Sitherwood
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Suzanne Sitherwood
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President and Chief Executive Officer
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a.
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To the best of my knowledge, the accompanying report on Form 10-Q for the quarter ended
December 31, 2012
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
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b.
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To the best of my knowledge, the information contained in the accompanying report on Form 10-Q for the quarter ended
December 31, 2012
fairly presents, in all material respects, the financial condition and results of operations of The Laclede Group, Inc.
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Date:
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February 5, 2013
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/s/ Mark D. Waltermire
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Mark D. Waltermire
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Executive Vice President, Chief Financial Officer
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