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8-K - FYE 2011 EARNINGS RELEASE 8-K - SPIRE MISSOURI INCfye2011earnings8-k.htm
                                                                                                NEWS RELEASE
Contact: Jessica B. Willingham
(314) 342-3300/jwillingham@lacledegas.com                                                                                                           

FOR IMMEDIATE RELEASE

The Laclede Group Reports Strong Year-End Earnings
Earnings are third highest in Company history

ST. LOUIS (October 28, 2011)The Laclede Group, Inc. (NYSE: LG) today reported consolidated net income for its fiscal year ended September 30, 2011 of $63.8 million, or $2.86 diluted earnings per share and third highest in the Company’s history, compared to $54.0 million, or $2.43 per share, for fiscal 2010. On a non-GAAP basis, 2011 net economic earnings totaled $62.4 million, or $2.79 per share, compared to $56.1 million, or $2.52 per share, for 2010. A chart of net economic earnings follows.
 
For the fourth quarter of 2011, the Company posted a loss of $2.8 million, or $0.13 per share, compared to a loss of $1.6 million, or $0.07 per share, for the same quarter of 2010. On a net economic earnings basis, the Company posted a loss of $3.1 million, or $0.14 per share in the current year, compared to a loss of $1.4 million, or $0.06 per share in the prior year. Laclede Gas typically experiences losses in its fiscal fourth quarter due to lower gas usage by utility customers during the summer months.
 
The Company’s operating results for fiscal year 2011 reflected improved performance at Laclede Gas Company, the Company’s core utility subsidiary. These positive results were partially offset by lower earnings at Laclede Energy Resources, Inc. (LER), Laclede Group’s non-regulated natural gas commodity service provider.
 
“Our regulated utility led the way this past year, as we achieved our third highest earnings in the history of the Company,” said Douglas H. Yaeger, chairman and chief executive officer of The Laclede Group. “These results are a testament to the dedication of our employees who are committed to serving our customers and shareholders.”
 
RESULTS OF OPERATIONS
 
 
Laclede Gas Company
 
Laclede Gas Company reported $53.8 million in net income for the fiscal year, a $14.1 million increase over 2010. The higher year-over-year earnings reflect the general rate increase that went into effect September 1, 2010 and higher earnings from non-regulated sales of propane inventories no longer required to serve utility customers. These positive impacts were partially offset by higher operating costs, as the net effect of lower maintenance costs and other operating efficiencies were more than offset by higher pension and benefit costs.
 
For the fourth quarter of 2011, Laclede Gas Company reported a loss of $5.4 million compared to a loss of $4.8 million for the same quarter last year. The Company typically experiences losses in the fourth quarter due to lower gas usage by utility customers during the summer months, as noted above.
 
 
 
NEWS RELEASE  I  The Laclede Group Reports Strong Year-End Earnings  I  October 28, 2011  I                                                                   1 of 4
 
 
 


Laclede Energy Resources

LER reported net income of $10.4 million for fiscal 2011, compared to $13.7 million for the prior year. LER’s net economic earnings for 2011 were $9.0 million, compared to $15.7 million, for 2010. These results were primarily due to reduced margins and lower natural gas sales volumes, driven mainly by narrow regional price differentials and limited price volatility that have prevailed throughout the year, and have become the norm in the marketplace.
 
For the fourth quarter of 2011, LER reported net income of $3.2 million, slightly above the same quarter last year. LER’s net economic earnings for the fourth quarter were $2.9 million, compared to $3.3 million for 2010. For the quarter, lower margins and volume were offset in part by lower transportation costs resulting from renegotiation of transportation contracts that were up for renewal.
 
ABOUT THE LACLEDE GROUP
 
The Laclede Group’s earnings are seasonal in nature and generally correspond with the heating season for Laclede Gas Company, its largest subsidiary.
 
 
For additional details on The Laclede Group’s fiscal results for the fourth quarter and year-end 2011, please see the accompanying unaudited Statements of Consolidated Income.  
 
 
Headquartered in St. Louis, Missouri, The Laclede Group, Inc. is a public utility holding company committed to providing reliable natural gas service through its regulated core utility operations, while engaging in non-regulated activities that provide opportunities for sustainable growth. Its subsidiary, Laclede Gas Company, the regulated operations of which are included in the Regulated Gas Distribution segment, serves approximately 625,000 residential, commercial and industrial customers in St. Louis City and parts of 10 counties in eastern Missouri. Laclede Group’s primary non-regulated business, Laclede Energy Resources, Inc., is included within the Non-Regulated Gas Marketing segment. For more information about Laclede Group and its subsidiaries, visit www.TheLacledeGroup.com.
 
CAUTIONARY STATEMENTS ON FORWARD-LOOKING INFORMATION
 
This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The Company’s future operating results may be affected by various uncertainties and risk factors, many of which are beyond the Company’s control, including weather conditions, governmental and regulatory policy and action, the competitive environment and economic factors. For a more complete description of these uncertainties and risk factors, see the Company’s Form 10-Q for the quarter ended June 30, 2011 filed with the Securities and Exchange Commission.
 
Net Economic Earnings
 
 
This press release includes the non-GAAP financial measures of “net economic earnings” and “net economic earnings per share.”  The Laclede Group’s non-regulated subsidiary LER and, to a lesser extent, Laclede Gas account for certain transactions through fair value measurements. As a result, management also uses these non-GAAP measures internally when evaluating the Company’s performance.  Net economic earnings exclude from net income the after-tax impacts of net unrealized gains and losses on energy-related derivatives resulting from
 
NEWS RELEASE  I  The Laclede Group Reports Strong Year-End Earnings  I  October 28, 2011  I                                                                   2 of 4


 
 
 

 

 
the current changes in the fair value of financial and physical transactions prior to their completion and settlement. Management believes that excluding these timing differences provides a useful representation of the economic impact of only the actual settled transactions and their effects on results of operations.  These internal non-GAAP operating metrics should not be considered as an alternative to, or more meaningful than, GAAP measures such as net income.
 
(Millions, except per share amounts)
Net Economic
Earnings
(Losses)
(Non-GAAP)
Add:
Unrealized
Gain (Loss) (1)
Net Income
(Loss)
(GAAP)
 
Net Economic
EPS (2)
(Non-GAAP)
 
Diluted
EPS
(GAAP)
                                   
Quarter Ended September 30, 2011
                                 
 
Laclede Gas Company
$
(5.4
)
$
 
$
(5.4
)
   
$
(0.24
)
$
(0.25
)
 
Laclede Energy Resources, Inc.
 
2.9
   
0.3
   
3.2
       
0.13
   
0.15
 
 
Other
 
(0.6
)
 
   
(0.6
)
     
(0.03
)
 
(0.03
)
 
   Total
$
(3.1
)
$
0.3
 
$
(2.8
)
   
$
(0.14
)
$
(0.13
)
 
Per Share Amounts (2)
$
(0.14
)
$
0.01
 
$
(0.13
)
               
                                     
Quarter Ended September 30, 2010
                                 
 
Laclede Gas Company
$
(4.9
)
$
0.1
 
$
(4.8
)
   
$
(0.22
)
$
(0.22
)
 
Laclede Energy Resources, Inc.
 
3.3
   
(0.3
)
 
3.0
       
0.15
   
0.14
 
 
Other
 
0.2
   
   
0.2
       
0.01
   
0.01
 
 
   Total
$
(1.4
)
$
(0.2
)
$
(1.6
)
   
$
(0.06
)
$
(0.07
)
 
Per Share Amounts (2)
$
(0.06
)
$
(0.01
)
$
(0.07
)
               

                                   
Twelve Months Ended September 30, 2011
                                 
 
Laclede Gas Company
$
53.8
 
$
 
$
53.8
     
$
2.41
 
$
2.41
 
 
Laclede Energy Resources, Inc.
 
9.0
   
1.4
   
10.4
       
0.40
   
0.47
 
 
Other
 
(0.4
)
 
   
(0.4
)
     
(0.02
)
 
(0.02
)
 
   Total
$
62.4
 
$
1.4
 
$
63.8
     
$
2.79
 
$
2.86
 
 
Per Share Amounts (2)
$
2.79
 
$
0.07
 
$
2.86
                 
 
Twelve Months Ended September 30, 2010
                                 
 
Laclede Gas Company
$
39.8
 
$
(0.1
)
$
39.7
     
$
1.79
 
$
1.78
 
 
Laclede Energy Resources, Inc.
 
15.7
   
(2.0
)
 
13.7
       
0.71
   
0.61
 
 
Other
 
0.6
   
   
0.6
       
0.02
   
0.04
 
 
   Total
$
56.1
 
$
(2.1
)
$
54.0
     
$
2.52
 
$
2.43
 
 
Per Share Amounts (2)
$
2.52
 
$
(0.09
)
$
2.43
                 


(1) 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 unrealized gain (loss) on energy-related derivative contracts. For the quarters ended September 30, 2011 and 2010, the amounts of income tax expense (benefit) included in the consolidated reconciling items above are $0.2 million and $(0.1) million, respectively. For the twelve months ended September 30, 2011 and 2010, the amounts of income tax expense (benefit) included in the consolidated reconciling items above are $0.9 million and $(1.3) million, respectively.
 
(2) Consolidated net economic earnings per share (EPS) are calculated by replacing consolidated net income with consolidated net economic earnings in the GAAP diluted EPS calculation.
 
Note: EPS amounts by company represent contributions to Laclede Group’s consolidated EPS.
 
 
NEWS RELEASE  I  The Laclede Group Reports Strong Year-End Earnings  I  October 28, 2011  I                                                                   3 of 4
 
 


STATEMENTS OF CONSOLIDATED INCOME–UNAUDITED

THE LACLEDE GROUP, INC.
(Thousands, Except Per Share Amounts)
     
Three Months Ended
September 30
 
Twelve Months Ended
September 30
   
2011
 
2010
 
2011
 
2010
                                 
OPERATING REVENUES
                               
 
Regulated Gas Distribution
 
$
95,949
   
$
83,103
   
$
913,190
   
$
864,297
 
 
Non-Regulated Gas Marketing
   
173,547
     
200,477
     
669,375
     
858,782
 
 
Other
   
1,550
     
451
     
20,742
     
11,950
 
 
Total Operating Revenues
   
271,046
     
284,031
     
1,603,307
     
1,735,029
 
OPERATING EXPENSES
                               
 
Regulated Gas Distribution
                               
 
   Natural and propane gas
   
39,244
     
30,352
     
549,947
     
519,905
 
 
   Other operation expenses
   
36,597
     
33,526
     
147,889
     
141,995
 
 
   Maintenance
   
6,536
     
6,653
     
25,049
     
27,244
 
 
   Depreciation and amortization
   
9,981
     
9,428
     
39,214
     
37,572
 
 
   Taxes, other than income taxes
   
7,986
     
7,117
     
60,752
     
61,407
 
 
Total Regulated Gas Distribution Operating Expenses
   
100,344
     
87,076
     
822,851
     
788,123
 
 
Non-Regulated Gas Marketing
   
168,332
     
195,566
     
652,567
     
836,687
 
 
Other
   
571
     
324
     
9,642
     
5,353
 
 
Total Operating Expenses
   
269,247
     
282,966
     
1,485,060
     
1,630,163
 
Operating Income
   
1,799
     
1,065
     
118,247
     
104,866
 
Other Income and (Income Deductions) - Net
   
(2,292
)
   
1,406
     
177
     
3,120
 
Interest Charges:
                               
 
Interest on long-term debt
   
5,740
     
6,146
     
23,161
     
24,583
 
 
Other interest charges
   
555
     
549
     
2,256
     
2,269
 
 
Total Interest Charges
   
6,295
     
6,695
     
25,417
     
26,852
 
Income (Loss) Before Income Taxes
   
(6,788
)
   
(4,224
)
   
93,007
     
81,134
 
Income Tax Expense (Benefit)
   
(3,961
)
   
(2,627
)
   
29,182
     
27,094
 
Net Income (Loss)
 
$
(2,827
)
 
$
(1,597
)
 
$
63,825
   
$
54,040
 
                                   
Average Number of Common Shares Outstanding:
                               
 
Basic
   
22,136
     
22,009
     
22,099
     
21,986
 
 
Diluted
   
22,136
     
22,009
     
22,171
     
22,039
 
                                   
Basic Earnings (Loss) Per Share of Common Stock
 
$
(0.13
)
 
$
(0.07
)
 
$
2.87
   
$
2.43
 
Diluted Earnings (Loss) Per Share of Common Stock
 
$
(0.13
)
 
$
(0.07
)
 
$
2.86
   
$
2.43
 






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NEWS RELEASE  I  The Laclede Group Reports Strong Year-End Earnings  I  October 28, 2011  I                                                                   4 of 4