SPIRE INC - FORM 8-K - EX-99.1 - EARNINGS RELEASE

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8-K - FORM 8-K - SPIRE INC	a20133rdquarterearningsrel.htm



		NEWS RELEASE

Investor Contact: Scott W. Dudley Jr. 314-342-0878 sdudley@TheLacledeGroup.com	Media Contact: Jessica B. Willingham 314-342-3300 jwillingham@TheLacledeGroup.com

FOR IMMEDIATE RELEASE

The Laclede Group Reports Third Quarter Earnings

ST. LOUIS (July 30, 2013) - The Laclede Group, Inc. (NYSE: LG) (“Company” or “Laclede”) today reported operating results for its fiscal 2013 third quarter and nine months ended June 30, 2013. Third quarter highlights include:


•	Net income of $6.6 million, or $0.25 per diluted share


•	Net economic earnings (non-GAAP) of $8.2 million, or $0.36 per share, down 8 percent


•	Gas Utility net economic earnings up 45 percent reflecting more favorable weather

“Our third quarter Gas Utility results were up significantly due to cooler weather and recovery of our ongoing investment in upgrading our distribution pipelines, while Gas Marketing earnings declined reflecting low price volatility and narrow basis differentials that exist in the natural gas markets today,” said Suzanne Sitherwood, president and chief executive officer of The Laclede Group. “Meanwhile, we moved closer to finalizing the Missouri Gas Energy (MGE) acquisition. We have obtained Missouri regulatory approval, completed a successful equity offering to finance the acquisition, and remain on track for the integration of MGE,” she added.

QUARTERLY RESULTS



				Three Months Ended June 30
				(Millions)					(Per Diluted Share)
				2013			2012		2013			2012
Net Income (GAAP)				$	6.6		$	8.4	$	0.25		$	0.38
		Fair value adjustments			0.2			0.5		0.01			0.02
		Acquisition-related impacts:
			Costs		1.4			—		0.05			—
			Increase in shares		—			—		0.05			—
Net Economic Earnings (non-GAAP)*				$	8.2		$	8.9	$	0.36		$	0.40

Net Economic Earnings by Segment
	Gas Utility			$	6.8		$	4.7	$	0.30		$	0.21
	Gas Marketing				1.6			3.6		0.07			0.16
	Other				(0.2	)		0.6		(0.01	)		0.03
Total				$	8.2		$	8.9	$	0.36		$	0.40

* See “Net Economic Earnings and Reconciliation to GAAP” on page 10.

The Laclede Group reported consolidated net income for its third quarter of fiscal 2013 of $6.6 million ($0.25 per share), down from $8.4 million ($0.38 per share) for the same period last year. Net economic earnings (non-GAAP) for the third quarter were $8.2 million ($0.36 per share), down 8 percent from $8.9 million ($0.40 per share) a year ago. Net economic earnings exclude from net income the effect of unrealized gains and losses on energy-related derivatives and the impact of the pending MGE acquisition including acquisition-related costs and the per share impact of shares issued in May 2013 to finance the acquisition.

The decreased earnings were driven by lower operating results from Gas Marketing, largely offset by increases in Gas Utility income reflecting more favorable weather and higher infrastructure surcharge revenues.

Gas Utility

The Gas Utility segment, which includes the regulated gas distribution operations of Laclede Gas, reported net income and net economic earnings of $6.8 million for the quarter ended June 30, 2013, up from net income and net economic earnings of $4.6 million and $4.7 million, respectively, for the same period last year. The improvement was primarily due to higher sales margins, reflecting cooler weather this year compared to above normal temperatures a year ago, and increased Infrastructure System Replacement Surcharge (ISRS) revenues. These positive factors were partially offset by higher operations and maintenance expenses as well as increased depreciation and amortization expenses. The higher ISRS revenues are a result of increased investment in distribution pipeline replacement to enhance safety and reliability for Laclede Gas customers.

As previously announced, Laclede Gas filed a general rate case with the Missouri Public Service Commission (MoPSC) last December. On June 26, 2013, the MoPSC approved an agreement filed by Laclede Gas and other parties to the case in which Laclede Gas will incorporate into its base rates, effective September 1, 2013, the annualized ISRS revenues of $14.8 million it was already collecting in customers' bills. At that time, the ISRS charge will be reset to zero, and Laclede Gas may make future ISRS filings for any qualifying expenditures it incurs after January 31, 2013.

Gas Marketing

The Gas Marketing segment, which includes non-regulated operations of Laclede Energy Resources, reported volumes purchased and sold that were essentially the same for the quarter ended June 30, 2013, compared to the prior year. Quarterly operating revenues of $33.4 million were down from $70.0 million in the prior-year period, and operating expenses were also down significantly for the quarter. Both decreases reflect a higher percentage of transactions being reported as trading activities, which are recorded on a net rather than a gross basis and had no direct impact on earnings. The decreases were partially offset by the impact of higher per unit gas prices. Net income was $1.4 million for the third quarter, down from $3.2 million for the same period last year. Net economic earnings (non-GAAP), which exclude the impact of energy-related derivatives, were $1.6 million, down from $3.6 million for the same period a year ago. The decrease in both net income and net economic earnings reflect reduced sales margins due to low price volatility and narrow basis differentials that continue to exist in the natural gas marketplace, as well as the expiration of a favorable gas supply contract in December 2012.

YEAR-TO-DATE RESULTS



				Nine Months Ended June 30
				(Millions)						(Per Diluted Share)
				2013			2012			2013			2012
Net Income (GAAP)				$	62.4		$	63.3		$	2.62		$	2.82
		Fair value adjustments			1.2			(1.1	)		0.04			(0.05	)
		Acquisition-related impacts:
			Costs		5.3			—			0.23			—
			Increase in shares		—			—			0.15			—
Net Economic Earnings (non-GAAP)*				$	68.9		$	62.2		$	3.04		$	2.77

Net Economic Earnings by Segment
	Gas Utility			$	62.3		$	50.9		$	2.75		$	2.29
	Gas Marketing				7.3			9.6			0.32			0.43
	Other				(0.7	)		1.7			(0.03	)		0.05
Total				$	68.9		$	62.2		$	3.04		$	2.77

* See “Net Economic Earnings and Reconciliation to GAAP” on page 10.

For the first nine months of fiscal 2013, The Laclede Group reported consolidated net income of $62.4 million ($2.62 per share), compared to $63.3 million ($2.82 per share) for the same period last year. Net economic earnings (non-GAAP) for the nine months ended June 30, 2013 were $68.9 million ($3.04 per share), up 11 percent from $62.2 million ($2.77 per share) for the same period last year. A majority of the difference between current year net income and net economic earnings per share is due to the $8.5 million ($5.3 million after tax) of acquisition-related costs incurred year-to-date in fiscal 2013.

Excluding those costs, the share impact of the May 2013 equity issuance, and the effect of unrealized gains and losses on energy-related derivatives, the increased earnings were driven by improved Gas Utility performance, reflecting more favorable weather and higher infrastructure surcharge revenues, offset in part by lower Gas Marketing earnings.

Gas Utility

For the nine months ended June 30, 2013, Gas Utility net income was $62.3 million, up from $51.4 million for the same period a year ago. Net economic earnings for both the current and prior year were essentially equal to the reported GAAP results. The fiscal year-to-date improvement was driven by higher natural gas sales margins due to a return to more normal weather this year compared to record warm temperatures a year ago, higher ISRS revenues, reduced bad debt expenses and lower employee benefit expenses.

Gas Marketing

For the nine months ended June 30, 2013, operating revenues were $129.9 million, down from $288.0 million in the prior-year period, and operating expenses decreased to $134.0 million from $279.8 million. The decreases relate to the higher percentage of transactions being reported as trading activities, as described above for the third quarter. For the first nine months of fiscal 2013, Gas Marketing net income was $6.1 million, down from $10.7 million for 2012, and net economic earnings for the first nine months of fiscal 2013 decreased to $7.3 million from $9.6 million in the prior year. This decrease in net economic earnings was largely due to the expiration of a favorable supply contract in December 2012, partially offset by higher volumes purchased and sold.

ACQUISITION UPDATE

As announced on July 17, the MoPSC approved Laclede Gas's purchase of the assets of MGE from Southern Union Company. The approval is effective July 31, 2013, and permits closing on the $975 million purchase on or after September 1, 2013, subject to the purchase and sale agreement and related closing conditions. Further, Laclede Gas was authorized to complete the financing to support the acquisition.

The agreement provides for protections and assurances that are consistent with the no net detriment standard for approving such transactions in Missouri and that are typical for a transaction of this scope. Selected provisions of the approval include:


•	Protections for customers and the public from any adverse impacts from the transaction, including continuation of existing energy efficiency programs and no recovery of acquisition transaction costs or premium paid


•	Operating and reporting requirements relating to gas supply, safety, service quality and financial performance


•	Right to file an MGE general rate case no later than September 18, 2013


•	An October 1, 2015 moratorium on filing subsequent rate cases for Laclede Gas in the absence of unusual circumstances


•	Provisions for the deferral of certain one-time costs to integrate MGE and Laclede Gas; recovery of these costs will be included in the next general rate case after 2013 for the two entities

In support of the acquisition, The Laclede Group completed a public offering of 10.0 million shares of its common stock on May 29, generating net proceeds of $428.0 million. In addition, the Company and Laclede Gas are working with its syndicate of financial institutions to expand its current revolving credit facilities to support the working capital needs of the new, larger gas utility. Laclede Gas is also finalizing its planned issuance of $450 million of first mortgage bonds.

In the third quarter of fiscal 2013, The Laclede Group incurred acquisition-related costs of $2.2 million ($1.4 million after tax, or $0.05 per share), which were reported in the Other segment. For the nine-month period, acquisition-related costs totaled $8.5 million ($5.3 million after tax, or $0.23 per share).

CASH FLOWS AND CAPITAL STRUCTURE

Net cash provided by operating activities was $167.0 million for the nine months ended June 30, 2013, compared with net cash provided by operating activities of $128.2 million for the same period last year. The increase is primarily due to the timing of collections of gas cost under the PGA Clause, as well as decreased cash payments for the funding of pension plans. Excluding temporary changes in working capital, such as the effect of regulatory timing differences in the recovery of certain costs and the timing of cash payments for income taxes, operating cash flows (non-GAAP) for the first nine months of fiscal 2013 were $98.8 million, up from $93.8 million for the first nine months of fiscal 2012. See reconciliation of Operating Cash Flows (non-GAAP) to Net Cash Provided by Operating Activities (GAAP) on page 11.

Capital expenditures for the nine months ended June 30, 2013 increased to $96.8 million from $76.8 million in the comparable period a year ago. The increase was driven by the Company's planned investments in ongoing accelerated replacement of portions of its distribution system and expenditures to upgrade its technology platforms.

The Laclede Group maintains a strong capital structure, which at June 30, 2013 consisted of 70 percent equity compared to 63 percent at June 30, 2012. The higher equity component of capitalization reflects the Company's issuance of 10.0 million common stock shares in May 2013, partially offset by $100 million of long-term debt issued by Laclede Gas earlier this year. There were no short-term borrowings outstanding at June 30, 2013 or June 30, 2012. The equity component of the Company's long-term capitalization will decrease to a targeted level of approximately 53 percent following the planned issuance of $450 million of Laclede Gas first mortgage bonds.

For additional details on The Laclede Group's results for the third quarter and first nine months of fiscal 2013, please see the accompanying unaudited Statements of Consolidated Income, unaudited Condensed Consolidated Balance Sheets, and unaudited Condensed Consolidated Statements of Cash Flows.

CONFERENCE CALL AND WEBCAST

As previously announced, The Laclede Group will host a conference call and webcast today to discuss its second quarter financial results. To access the call, please dial the number below approximately 5-10 minutes prior to the start time.



Date and Time:	Tuesday, July 30
	9 a.m. CDT (10 a.m. EDT)

Phone Numbers:	U.S.:	1-888-317-6016
	Canada:	1-855-669-9657
	International:	1-412-317-6016

The call will also be webcast in a listen-only format for the media and general public. The webcast can be accessed at www.TheLacledeGroup.com under the Investor Services tab.

A replay of the call will be available beginning at 11 a.m. CDT (Noon EDT) on July 30 and continuing until August 30 by dialing 1-877-344-7529 (U.S.) or 1-412-317-0088 (Canada/International). The Conference ID is 10031080. The webcast will be available for replay beginning July 30, at www.TheLacledeGroup.com.

ABOUT THE LACLEDE GROUP

The Laclede Group, Inc. (NYSE: LG), headquartered in St. Louis, Missouri, is a public utility holding company. Its subsidiary, Laclede Gas Company, the regulated operations of which are included in the Gas Utility segment, serves approximately 630,000 residential, commercial and industrial customers in St. Louis City and parts of 10 counties in eastern Missouri. Laclede's primary non-utility business, Laclede Energy Resources, Inc., included in the Gas Marketing segment, provides non-regulated natural gas services. Laclede Group is committed to pursuing growth through 1) developing and investing in emerging technologies; 2) investing in infrastructure; 3) acquiring businesses to which the Company can apply its operating model, and 4) leveraging its current business unit competencies. For more information about Laclede and its subsidiaries, visit www.TheLacledeGroup.com.

CAUTIONARY STATEMENTS ON FORWARD-LOOKING INFORMATION AND NON-GAAP MEASURES

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, economic factors, the competitive environment, governmental and regulatory policy and action, and risks associated with the Company's pending acquisition. For a more complete description of these uncertainties and risk factors, see the Company's Form 10-K for the fiscal year ended September 30, 2012, filed with the Securities and Exchange Commission and the Company's Form 10-Q for the quarter ended June 30, 2013, to be filed later today.

This news release includes the non-GAAP financial measures of "net economic earnings," and "net economic earnings per share." 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 fair value accounting and timing adjustments associated with energy-related transactions. These adjustments, which primarily impact the Gas Marketing segment, include net unrealized gains and losses on energy-related derivatives resulting from the current changes in the fair value of financial and physical transactions prior to their completion and settlement, lower of cost or market inventory adjustments, and realized gains and losses on economic hedges prior to the sale of the physical commodity. In calculating net economic earnings, management also excludes from net income the after-tax impacts related to acquisition, divestiture, and restructuring activities. Management believes that excluding these items provides a useful representation of the economic impact of actual settled transactions and overall results of ongoing operations. When calculating net economic earnings per share, management excludes from the weighted average number of shares the impact of the May 2013 equity issuance, completed in advance of the pending MGE acquisition. Management believes that this presentation provides a useful representation of operating performance by facilitating comparisons of year-over-year results.

These internal non-GAAP operating metrics should not be considered as an alternative to, or more meaningful than, GAAP measures such as net income.

This news release also includes the non-GAAP financial measure of "Operating Cash Flows." Management also uses this measure internally when evaluating longer-term cash flow impacts. This measure excludes the effects of temporary changes in working capital, such as the effect of regulatory timing differences in the recovery of certain costs and the timing of cash payments for income taxes. Management believes that excluding these items provides a useful representation of the economic impact of longer-term cash flows generated from business activities. This internal non-GAAP cash flow metric should not be considered as an alternative to, or more meaningful than, GAAP measures such as net cash provided by operating activities.

STATEMENTS OF CONSOLIDATED INCOME — UNAUDITED

THE LACLEDE GROUP, INC.

(Thousands, Except Per Share Amounts)



			Three Months Ended June 30,					Nine Months Ended June 30,
			2013			2012		2013		2012

OPERATING REVENUES
		Gas Utility	$	131,517		$	116,459	$	735,726	$	665,981
		Gas Marketing		33,433			70,014		129,937		288,036
		Other		339			376		4,242		1,920
		Total Operating Revenues		165,289			186,849		869,905		955,937
OPERATING EXPENSES
		Gas Utility
		Natural and propane gas		43,233			46,641		410,189		364,556
		Other operation and maintenance expenses		42,404			38,351		123,245		125,028
		Depreciation and amortization		11,519			10,186		33,742		30,450
		Taxes, other than income taxes		12,968			10,842		49,525		45,602
		Total Gas Utility Operating Expenses		110,124			106,020		616,701		565,636
		Gas Marketing		40,583			65,420		133,959		279,784
		Other		2,301			364		13,029		1,784
		Total Operating Expenses		153,008			171,804		763,689		847,204
Operating Income				12,281			15,045		106,216		108,733
Other Income and (Income Deductions) - Net				(398	)		451		2,024		3,771
Interest Charges:
		Interest on long-term debt		6,266			5,739		17,393		17,218
		Other interest charges		594			427		2,197		1,541
		Total Interest Charges		6,860			6,166		19,590		18,759
Income Before Income Taxes				5,023			9,330		88,650		93,745
Income Tax (Benefit) Expense				(1,562	)		897		26,256		30,454
Net Income			$	6,585		$	8,433	$	62,394	$	63,291

Weighted Average Number of Common Shares Outstanding:
	Basic			26,110			22,282		23,634		22,243
	Diluted			26,194			22,357		23,708		22,318

Basic Earnings Per Share of Common Stock			$	0.25		$	0.38	$	2.62	$	2.83
Diluted Earnings Per Share of Common Stock			$	0.25		$	0.38	$	2.62	$	2.82

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED

THE LACLEDE GROUP, INC.

(Thousands)



	June 30, 2013		September 30, 2012			June 30, 2012

ASSETS
Utility Plant	$	1,567,296	$	1,497,419		$	1,455,004
Less: Accumulated depreciation and amortization		484,380		478,120			474,008
Net Utility Plant		1,082,916		1,019,299			980,996

Other Property and Investments		59,229		56,814			61,016

Current Assets:
Cash and cash equivalents		556,489		27,457			21,523
Accounts receivable (net of allowance for doubtful accounts)		132,157		133,842			127,182
Delayed customer billings		11,319		—			—
Inventories		72,611		106,472			69,160
Other		68,813		75,245			43,826
Total Current Assets		841,389		343,016			261,691

Regulatory assets and other deferred charges		438,505		461,133			437,635
Total Assets	$	2,422,039	$	1,880,262		$	1,741,338

CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock and paid-in capital	$	625,622	$	191,146		$	189,222
Retained earnings		443,691		414,581			424,588
Accumulated other comprehensive income (loss)		11,684		(4,116	)		(2,652	)
Total Common Stock Equity		1,080,997		601,611			611,158
Long-term debt (less current portion)		464,444		339,416			339,401
Total Capitalization		1,545,441		941,027			950,559

Current Liabilities:
Notes payable		—		40,100			—
Accounts payable		104,862		89,503			81,322
Advance customer billings		—		25,146			6,225
Current portion of long-term debt		—		25,000			25,000
Accrued liabilities and other		77,939		72,375			66,736
Total Current Liabilities		182,801		252,124			179,283

Deferred Credits and Other Liabilities:
Deferred income taxes		377,965		355,509			335,366
Pension and postretirement benefit costs		181,691		196,558			158,011
Regulatory liabilities		61,335		59,432			57,033
Asset retirement obligations and other		72,806		75,612			61,086
Total Deferred Credits and Other Liabilities		693,797		687,111			611,496
Total Capitalization and Liabilities	$	2,422,039	$	1,880,262		$	1,741,338

CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS — UNAUDITED

THE LACLEDE GROUP, INC.

(Thousands)



	Nine Months Ended
	June 30,
	2013			2012

Operating Activities:
Net Income	$	62,394		$	63,291
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization, and accretion		34,721			30,900
Deferred income taxes and investment tax credits		13,208			22,448
Other – net		1,753			(425	)
Changes in assets and liabilities		54,968			11,985
Net cash provided by (used in) operating activities		167,044			128,199

Investing Activities:
Capital expenditures		(96,816	)		(76,780	)
Other investments		(2,558	)		(1,338	)
Net cash used in investing activities		(99,374	)		(78,118	)

Financing Activities:
Issuance of long-term debt		125,000			—
Maturity of first mortgage bonds		(25,000	)		—
Repayment of short-term debt – net		(40,100	)		(46,000	)
Issuance of common stock		431,329			3,162
Dividends paid		(28,651	)		(27,599	)
Other		(1,216	)		(1,348	)
Net cash provided by (used in) financing activities		461,362			(71,785	)

Net Increase (Decrease) in Cash and Cash Equivalents		529,032			(21,754	)
Cash and Cash Equivalents at Beginning of Period		27,457			43,277
Cash and Cash Equivalents at End of Period	$	556,489		$	21,523

NET ECONOMIC EARNINGS AND RECONCILIATION TO GAAP

THE LACLEDE GROUP, INC.

(Millions, except per share amounts)



		Gas Utility			Gas Marketing				Other				Total				Per Share Amounts (2)

Quarter Ended June 30, 2013
	Net Income (Loss) (GAAP)		$	6.8		$	1.4			$	(1.6	)		$	6.6			$	0.25
	Unrealized (gain) loss on energy-related derivatives (1)			—			(0.3	)			—				(0.3	)			(0.01	)
	Lower of Cost or Market Inventory Adjustments			—			0.5				—				0.5				0.02
	Acquisition, divestiture and restructuring activities (1)			—			—				1.4				1.4				0.05
	Weighted Average Shares Adjustment (2)			—			—				—				—				0.05
	Net Economic Earnings (Losses) (Non-GAAP)		$	6.8		$	1.6			$	(0.2	)		$	8.2			$	0.36
	Diluted EPS (GAAP)		$	0.26		$	0.05			$	(0.06	)		$	0.25
	Net Economic EPS (Non-GAAP) (2)		$	0.30		$	0.07			$	(0.01	)		$	0.36

Quarter Ended June 30, 2012
	Net Income (GAAP)		$	4.6		$	3.2			$	0.6			$	8.4			$	0.38
	Unrealized (gain) loss on energy-related derivatives (1)			0.1			0.9				—				1.0				0.04
	Lower of cost or market inventory adjustments (1)			—			(0.5	)			—				(0.5	)			(0.02	)
	Net Economic Earnings (Non-GAAP)		$	4.7		$	3.6			$	0.6			$	8.9			$	0.40
	Diluted EPS (GAAP)		$	0.20		$	0.14			$	0.04			$	0.38
	Net Economic EPS (Non-GAAP) (2)		$	0.20		$	0.16			$	0.04			$	0.40

Nine Months Ended June 30, 2013
	Net Income (Loss) (GAAP)		$	62.3		$	6.1			$	(6.0	)		$	62.4			$	2.62
	Unrealized (gain) loss on energy-related derivatives (1)			—			0.6				—				0.6				0.02
	Lower of Cost or Market Inventory Adjustments			—			0.6				—				0.6				0.02
	Acquisition, divestiture and restructuring activities (1)			—			—				5.3				5.3				0.23
	Weighted Average Shares Adjustment (2)			—			—				—				—				0.15
	Net Economic Earnings (losses) (Non-GAAP)		$	62.3		$	7.3			$	(0.7	)		$	68.9			$	3.04
	Diluted EPS (GAAP)		$	2.61		$	0.26			$	(0.25	)		$	2.62
	Net Economic EPS (Non-GAAP) (2)		$	2.75		$	0.32			$	(0.03	)		$	3.04

Nine Months Ended June 30, 2012
	Net Income (GAAP)		$	51.4		$	10.7			$	1.2			$	63.3			$	2.82
	Unrealized (gain) loss on energy-related derivatives (1)			—			(1.3	)			—				(1.3	)			(0.06	)
	Lower of cost or market inventory adjustments (1)			—			0.1				—				0.1				—
	Realized (gain) loss on economic hedges prior to the sale of the physical commodity (1)			—			0.1				—				0.1				0.01
	Net Economic Earnings (Non-GAAP)		$	51.4		$	9.6			$	1.2			$	62.2			$	2.77
	Diluted EPS (GAAP)		$	2.29		$	0.48			$	0.05			$	2.82
	Net Economic EPS (Non-GAAP) (2)		$	2.29		$	0.43			$	0.05			$	2.77

(1) Amounts presented net of income taxes, which were 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 June 30, 2013 and 2012, the total net income tax (benefit) expense included in the reconciling items is $(1.0) million and $(0.3) million, respectively. For the nine months ended June 30, 2013 and 2012, the total net income tax (benefit) expense included in the reconciling items is $(4.0) million and $0.7 million, respectively.

(2) Consolidated net economic earnings per share (EPS) are calculated by replacing consolidated net income (loss) with consolidated net economic earnings (loss) in the GAAP diluted EPS calculation. Also, net economic earnings exclude the impact of the May 2013 equity offering to fund the pending acquisition of MGE. For the quarter ended June 30, 2013, the weighted average diluted shares used in the net economic earnings per share calculation was 22.5 million compared to 26.2 million in the GAAP EPS calculation. For the nine months ended June 30, 2013, the weighted average diluted shares used in the net economic earnings per share calculation was 22.5 million compared to 23.7 million in the GAAP EPS calculation.

Note: EPS amounts by segment represent contributions to The Laclede Group’s consolidated EPS.

OPERATING CASH FLOWS AND RECONCILIATION TO GAAP

THE LACLEDE GROUP, INC.

(Millions)



	Nine Months Ended
	June 30,
	2013			2012


Net cash provided by operating activities (GAAP)	$	167.0		$	128.2

Add (deduct):
Changes in assets and liabilities		(55.0	)		(12.0	)
Deferred income taxes and investment tax credits		(13.2	)		(22.4	)
Operating Cash Flows (Non-GAAP)	$	98.8		$	93.8

Net cash used in investing activities (GAAP)	$	(99.4	)	$	(78.2	)
Net cash provided by (used in) financing activities (GAAP)	$	461.4		$	(71.8	)

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