NEWS RELEASE
THE LACLEDE GROUP
720 Olive Street, St. Louis, MO 63101
FOR IMMEDIATE RELEASE
The Laclede Group Reports Second
Quarter 2007 Earnings, Declares Dividend
St. Louis, April 27, 2007 - The Laclede Group, Inc. (NYSE: LG) today released earnings results for the second quarter of its fiscal year 2007 and declared a quarterly dividend of 36 ½ cents per share on its common stock, payable July 2, 2007, to shareholders of record on June 11, 2007.
Consolidated earnings for the quarter ended March 31, 2007 were $20.8 million, which essentially equaled earnings of $20.9 million reported for the same period last year. Diluted earnings per share were $.97 for the second quarter this year compared to $.98 per share for the quarter ended March 31, 2006.
Quarterly earnings reported by Laclede Group’s core subsidiary, Laclede Gas Company, Missouri’s largest natural gas distribution utility, were $20.7 million, up $1.7 million compared to the same quarter last year. Results improved primarily due to increased earnings on sales of natural gas to entities outside of the traditional utility service area and higher Infrastructure System Replacement Surcharge revenues.
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Laclede Energy Resources, Inc. (LER), Laclede Group’s non-regulated natural gas commodity service provider, posted earnings totaling $3.3 million, which were approximately $2.2 million below the same period last year. While LER has continued to report year-over-year growth in sales volumes, margins this year were reduced as volatility in Gulf Coast markets stabilized from the unprecedented levels a year ago.
The results of SM&P Utility Resources, Inc., Laclede Group’s non-regulated underground facility locating and marking service business, improved $.4 million compared with the same period last year. The improvement is primarily attributable to the effect of settlement costs associated with employment-related litigation recorded during the same period last year, which was partially offset by higher operating expenses.
Laclede Group’s consolidated net income for the six-month period ended March 31, 2007 was $39.9 million, compared to $47.1 million for the same period last year. Diluted earnings per share for the six-month period were $1.86 compared to $2.22 reported for the same period last year.
The decrease in the six-month consolidated earnings is largely attributable to lower margins on sales by LER, and by Laclede Gas Company to customers outside of the traditional utility service area, with earnings declining $3.8 million and $2.8 million, respectively. Laclede Gas also experienced higher operating and depreciation expenses during the period. These factors were partially offset by increased sales volumes of natural gas made to customers both in and outside the utility’s service area. SM&P’s results for the same period declined $.5 million primarily due to the aforementioned factors.
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The Laclede Group’s earnings are seasonal in nature and are typically concentrated in the November through April period, which generally corresponds with the heating season for Laclede Gas Company, its largest subsidiary.
In addition, Laclede Gas Company declared a quarterly dividend of 31 ¼ cents per share on Preferred Stock, Series B, and a quarterly dividend of 28 ½ cents per share on Preferred Stock, Series C, payable June 30, 2007, to shareholders of record June 11, 2007.
For further details concerning The Laclede Group’s second quarter results, see the accompanying unaudited Statements of Consolidated Income.
Note: 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 December 31, 2006, filed with the Securities and Exchange Commission.
UNAUDITED
STATEMENTS OF CONSOLIDATED INCOME
THE LACLEDE GROUP, INC.
(Thousands, Except Per Share Amounts)
| | | Three Months Ended March 31, | | Six Months Ended March 31, |
| | 2007 | | 2006 | | 2007 | | 2006 |
| | | | | | | | |
OPERATING REVENUES | | | | | | | | |
| Regulated | | | | | | | | |
| Gas distribution | | $ 493,593 | | $ 489,283 | | $ 842,081 | | $ 900,684 |
| Non-Regulated | | | | | | | | |
| Services | | 30,134 | | 30,559 | | 66,563 | | 66,017 |
| Gas marketing | | 175,850 | | 187,733 | | 329,317 | | 429,065 |
| Other | | 1,257 | | 1,205 | | 2,434 | | 2,249 |
| Total operating revenues | | 700,834 | | 708,780 | | 1,240,395 | | 1,398,015 |
| | | | | | | | | |
OPERATING EXPENSES | | | | | | | | |
| Regulated | | | | | | | | |
| Natural and propane gas | | 373,576 | | 371,388 | | 625,099 | | 683,427 |
| Other operation expenses | | 36,816 | | 37,764 | | 70,496 | | 70,869 |
| Maintenance | | 6,060 | | 5,267 | | 11,658 | | 10,255 |
| Depreciation and amortization | | 8,568 | | 8,178 | | 17,065 | | 14,261 |
| Taxes, other than income taxes | | 28,348 | | 29,258 | | 47,107 | | 48,897 |
| Total regulated operating expenses | | 453,368 | | 451,855 | | 771,425 | | 827,709 |
| Non-Regulated | | | | | | | | |
| Services | | 34,753 | | 35,991 | | 71,114 | | 69,910 |
| Gas marketing | | 170,881 | | 178,872 | | 318,549 | | 411,346 |
| Other | | 1,096 | | 851 | | 2,173 | | 1,702 |
| Total operating expenses | | 660,098 | | 667,569 | | 1,163,261 | | 1,310,667 |
Operating Income | | 40,736 | | 41,211 | | 77,134 | | 87,348 |
Other Income and (Income Deductions) – Net | | 1,071 | | 1,179 | | 4,374 | | 2,464 |
| | | | | | | | | |
Interest Charges: | | | | | | | | |
| Interest on long-term debt | | 5,625 | | 5,643 | | 11,251 | | 11,286 |
| Interest on long-term debt to unconsolidated affiliate trust | | 893 | | 893 | | 1,786 | | 1,786 |
| Other interest charges | | 2,940 | | 3,041 | | 6,374 | | 5,164 |
| Total interest charges | | 9,458 | | 9,577 | | 19,411 | | 18,236 |
Income Before Income Taxes | | 32,349 | | 32,813 | | 62,097 | | 71,576 |
Income Tax Expense | | 11,519 | | 11,871 | | 22,168 | | 24,454 |
Net Income | | 20,830 | | 20,942 | | 39,929 | | 47,122 |
Dividends on Redeemable Preferred Stock – Laclede Gas | | 11 | | 13 | | 23 | | 25 |
Net Income Applicable to Common Stock | | $ 20,819 | | $ 20,929 | | $ 39,906 | | $ 47,097 |
| | | | | | | | |
Average Number of Common Shares Outstanding | | 21,445 | | 21,231 | | 21,413 | | 21,211 |
Basic Earnings Per Share of Common Stock | | $ 0.97 | | $ 0.99 | | $ 1.86 | | $ 2.22 |
Diluted Earnings Per Share of Common Stock | | $ 0.97 | | $ 0.98 | | $ 1.86 | | $ 2.22 |
