STATEMENTS OF CONSOLIDATED INCO
STATEMENTS OF CONSOLIDATED INCOME (USD $) | ||||
In Thousands, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 | 6 Months Ended
Mar. 31, 2010 | 6 Months Ended
Mar. 31, 2009 |
Operating Revenues: | ||||
Regulated Gas Distribution | $373,520 | $440,468 | $656,449 | $798,569 |
Non-Regulated Gas Marketing | 261,473 | 217,589 | 458,998 | 532,629 |
Other | 332 | 1,011 | 11,044 | 2,126 |
Total Operating Revenues | 635,325 | 659,068 | 1,126,491 | 1,333,324 |
Regulated Gas Distribution | ||||
Natural and propane gas | 250,238 | 313,506 | 432,238 | 568,403 |
Other operation expenses | 37,779 | 40,251 | 75,242 | 76,552 |
Maintenance | 7,219 | 7,261 | 13,393 | 13,795 |
Depreciation and amortization | 9,385 | 9,180 | 18,748 | 18,299 |
Taxes, other than income taxes | 26,050 | 28,216 | 42,274 | 46,574 |
Total Regulated Gas Distribution Operating Expenses | 330,671 | 398,414 | 581,895 | 723,623 |
Non-Regulated Gas Marketing | 254,161 | 204,487 | 448,891 | 496,088 |
Other | 223 | 927 | 4,771 | 1,685 |
Total Operating Expenses | 585,055 | 603,828 | 1,035,557 | 1,221,396 |
Operating Income | 50,270 | 55,240 | 90,934 | 111,928 |
Other Income and (Income Deductions) - Net | 318 | 247 | 1,905 | 986 |
Interest Charges: | ||||
Interest on long-term debt | 6,145 | 6,145 | 12,291 | 12,291 |
Other interest charges | 526 | 1,168 | 1,089 | 3,814 |
Total Interest Charges | 6,671 | 7,313 | 13,380 | 16,105 |
Income Before Income Taxes and Dividends on Laclede Gas Redeemable Preferred Stock | 43,917 | 48,174 | 79,459 | 96,809 |
Income Tax Expense | 15,897 | 17,356 | 28,553 | 34,677 |
Dividends on Laclede Gas Redeemable Preferred Stock | 0 | 7 | 0 | 15 |
Net Income | $28,020 | $30,811 | $50,906 | $62,117 |
Average Number of Common Shares Outstanding: | ||||
Basic | 21,980 | 21,891 | 21,968 | 21,874 |
Diluted | 22,027 | 21,969 | 22,014 | 21,963 |
Basic Earnings Per Share of Common Stock: | ||||
Basic Earnings Per Share of Common Stock | 1.26 | 1.39 | 2.29 | 2.81 |
Diluted Earnings Per Share of Common Stock: | ||||
Diluted Earnings Per Share of Common Stock | 1.26 | 1.39 | 2.29 | 2.8 |
Dividends Declared Per Share of Common Stock | 0.395 | 0.385 | 0.79 | 0.77 |
STATEMENTS OF CONSOLIDATED COMP
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (USD $) | ||||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 | 6 Months Ended
Mar. 31, 2010 | 6 Months Ended
Mar. 31, 2009 |
Statement of Income and Comprehensive Income [Abstract] | ||||
Net Income | $28,020 | $30,811 | $50,906 | $62,117 |
Net gains (losses) on cash flow hedging derivative instruments: | ||||
Net hedging gain arising during the period | 3,733 | 5,002 | 7,476 | 7,041 |
Reclassification adjustment for gains included in net income | (1,565) | (2,295) | (5,616) | (10,567) |
Net unrealized gains (losses) on cash flow hedging derivative instruments | 2,168 | 2,707 | 1,860 | (3,526) |
Defined benefit pension and other postretirement benefit plans: | ||||
Amortization of actuarial loss included in net periodic pension and postretirement benefit cost | 99 | 50 | 197 | 100 |
Other Comprehensive Income (Loss), Before Tax | 2,267 | 2,757 | 2,057 | (3,426) |
Income Tax Expense (Benefit ) Related to Items of Other Comprehensive Income (Loss) | 877 | 1,063 | 796 | (1,317) |
Other Comprehensive Income (Loss), Net of Tax | 1,390 | 1,694 | 1,261 | (2,109) |
Comprehensive Income | $29,410 | $32,505 | $52,167 | $60,008 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | |||
In Thousands | Mar. 31, 2010
| Sep. 30, 2009
| Mar. 31, 2009
|
ASSETS | |||
Utility Plant | $1,301,013 | $1,280,238 | $1,247,921 |
Less: Accumulated depreciation and amortization | 435,205 | 424,309 | 414,956 |
Net Utility Plant | 865,808 | 855,929 | 832,965 |
Non-utility property | 4,072 | 4,061 | 4,591 |
Other investments | 49,193 | 44,973 | 43,805 |
Other Property and Investments | 53,265 | 49,034 | 48,396 |
Current Assets: | |||
Cash and cash equivalents | 83,765 | 74,591 | 93,602 |
Accounts receivable: | |||
Utility | 130,460 | 81,262 | 166,854 |
Non-utility | 78,857 | 42,382 | 64,505 |
Other | 6,466 | 7,511 | 5,090 |
Allowance for doubtful accounts | (12,782) | (11,160) | (12,666) |
Delayed customer billings | 38,955 | 0 | 35,213 |
Inventories: | |||
Natural gas stored underground at LIFO cost | 43,757 | 93,313 | 69,940 |
Propane gas at FIFO cost | 15,625 | 19,847 | 19,861 |
Materials, supplies, and merchandise at average cost | 4,338 | 4,158 | 5,501 |
Natural gas receivable | 25,672 | 28,344 | 9,131 |
Derivative instrument assets | 14,600 | 17,178 | 30,652 |
Unamortized purchased gas adjustments | 0 | 0 | 8,891 |
Deferred income taxes | 626 | 1,707 | 0 |
Prepayments and other | 7,836 | 9,650 | 5,404 |
Total Current Assets | 438,175 | 368,783 | 501,978 |
Deferred Charges: | |||
Regulatory assets | 467,078 | 482,999 | 395,869 |
Other | 6,579 | 5,273 | 5,748 |
Total Deferred Charges | 473,657 | 488,272 | 401,617 |
Total Assets | 1,830,905 | 1,762,018 | 1,784,956 |
Capitalization: | |||
Common Stock (70,000,000 shares authorized, 22,271,064, 22,168,120, and 22,138,864 shares issued, respectively) | 22,271 | 22,168 | 22,139 |
Paid-in Capital | 156,018 | 154,218 | 151,327 |
Retained earnings | 376,142 | 342,810 | 357,887 |
Accumulated other comprehensive income (loss) | (905) | (2,166) | 2,328 |
Total Common Stock Equity | 553,526 | 517,030 | 533,681 |
Long-term debt (less current portion) - Laclede Gas | 364,269 | 389,240 | 389,211 |
Total Capitalization | 917,795 | 906,270 | 922,892 |
Current Liabilities: | |||
Notes payable | 114,950 | 129,800 | 238,800 |
Accounts payable | 122,844 | 72,765 | 100,416 |
Advance customer billings | 0 | 21,140 | 0 |
Current portion of long-term debt | 25,000 | 0 | 0 |
Wages and compensation accrued | 12,893 | 12,682 | 12,304 |
Dividends payable | 8,962 | 8,687 | 8,675 |
Customer deposits | 11,663 | 12,400 | 13,045 |
Interest accrued | 9,865 | 9,943 | 10,333 |
Taxes accrued | 42,830 | 15,951 | 34,078 |
Unamortized purchased gas adjustments | 1,148 | 3,130 | 0 |
Deferred income taxes | 0 | 0 | 1,959 |
Other | 12,839 | 12,642 | 9,616 |
Total Current Liabilities | 362,994 | 299,140 | 429,226 |
Deferred Credits and Other Liabilities: | |||
Deferred income taxes | 248,968 | 256,196 | 232,446 |
Unamortized investment tax credits | 3,646 | 3,754 | 3,863 |
Pension and postretirement benefit costs | 201,643 | 202,681 | 103,226 |
Asset retirement obligations | 26,266 | 25,503 | 27,638 |
Regulatory liabilities | 45,088 | 44,225 | 42,506 |
Other | 24,505 | 24,249 | 23,159 |
Total Deferred Credits and Other Liabilities | 550,116 | 556,608 | 432,838 |
Total Capitalization and Liabilities | $1,830,905 | $1,762,018 | $1,784,956 |
PARENTHETICAL DATA TO THE CONSO
PARENTHETICAL DATA TO THE CONSOLIDATED BALANCE SHEETS | |||
Mar. 31, 2010
| Sep. 30, 2009
| Mar. 31, 2009
| |
ASSETS | |||
Common stock shares authorized (in shares) | 70,000,000 | 70,000,000 | 70,000,000 |
Common stock shares issued (in shares) | 22,271,064 | 22,168,120 | 22,138,864 |
STATEMENTS OF CONSOLIDATED CASH
STATEMENTS OF CONSOLIDATED CASH FLOWS (USD $) | ||
In Thousands | 6 Months Ended
Mar. 31, 2010 | 6 Months Ended
Mar. 31, 2009 |
Operating Activities: | ||
Net Income | $50,906 | $62,117 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation, amortization, and accretion | 18,891 | 18,446 |
Deferred income taxes and investment tax credits | (15,953) | (3,819) |
Other - net | 1,375 | 3,412 |
Changes in assets and liabilities: | ||
Accounts receivable - net | (83,006) | (24,824) |
Unamortized purchased gas adjustments | (1,982) | 24,520 |
Deferred purchased gas costs | 25,323 | (54,990) |
Accounts payable | 50,986 | (57,281) |
Delayed customer billings - net | (60,095) | (60,761) |
Taxes accrued | 26,752 | 22,683 |
Natural gas stored underground | 49,556 | 136,327 |
Other assets and liabilities | 7,096 | 32,951 |
Net cash provided by operating activities | 69,849 | 98,781 |
Investing Activities: | ||
Capital expenditures | (24,850) | (26,597) |
Other investments | (3,560) | (1,446) |
Net cash used in investing activities | (28,410) | (28,043) |
Financing Activities: | ||
(Repayment) issuance of short-term debt - net | (14,850) | 22,900 |
Changes in book overdrafts | (207) | 419 |
Issuance of common stock | 1,041 | 2,705 |
Non-employee directors' restricted stock awards | (406) | (570) |
Dividends paid | (17,297) | (16,757) |
Preferred stock reacquired | 0 | (627) |
Employees' taxes paid associated with restricted shares withheld upon vesting | (576) | (675) |
Excess tax benefits from stock-based compenstation | 66 | 686 |
Other | (36) | (116) |
Net cash (used in) provided by financing activities | (32,265) | 7,965 |
Net Increase in Cash and Cash Equivalents | 9,174 | 78,703 |
Cash and Cash Equivalents at Beginning of Period | 74,591 | 14,899 |
Cash and Cash Equivalents at End of Period | 83,765 | 93,602 |
Supplemental Disclosure of Cash Paid (Refunded) During the Period for: | ||
Interest | 13,305 | 15,768 |
Income taxes | $13,772 | $9,254 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These notes are an integral part of the accompanying consolidated financial statements of The Laclede Group, Inc. (Laclede Group or the Company) and its subsidiaries. In the opinion of Laclede Group, this interim report includes all adjustments (consisting of only normal recurring accruals) necessary for the fair presentation of the results of operations for the periods presented. This Form 10-Q should be read in conjunction with the Notes to Consolidated Financial Statements contained in the Companys Fiscal Year2009 Form 10-K. The consolidated financial position, results of operations, and cash flows of Laclede Group are comprised primarily from the financial position, results of operations, and cash flowsof Laclede Gas Company (Laclede Gas or the Utility). Laclede Gas is a regulated natural gas distribution utility having a material seasonal cycle. As a result, these interim statements of income for Laclede Group are not necessarily indicative of annual results or representative of succeeding quarters of the fiscal year. Due to the seasonal nature of the business of Laclede Gas, earnings are typically concentrated in the November through April period, which generally corresponds with the heating season. REVENUE RECOGNITION - Laclede Gas reads meters and bills its customers on monthly cycles. The Utility records its regulated gas distribution revenues from gas sales and transportation services on an accrual basis that includes estimated amounts for gas delivered, but not yet billed. The accruals for unbilled revenues are reversed in the subsequent accounting period when meters are actually read and customers are billed. The amounts of accrued unbilled revenues at March31,2010 and 2009, for the Utility, were $22.6 million and $26.2 million, respectively. The amount of accrued unbilled revenue at September30,2009 was $12.7 million. EARNINGS PER COMMON SHARE - As discussed in the New Accounting Pronouncements section below, the Company adopted certain changes to the computation of earnings per share effective October1,2009. Generally accepted accounting principles in the United States of America (GAAP) require dual presentation of basic and diluted earnings per share (EPS). EPS is computed using the two-class method, which is an earnings allocation method for computing EPS that treats a participating security as having rights to earnings that would otherwise have been available to common shareholders. Certain of the Companys stock-based compensation awards pay nonforfeitable dividends to the participants during the vesting period and, as such, are deemed participating securities. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding that are increased for additional shares that would be outstanding if potentially dilutive non-participating securities were converted to common shares, pursuant to the treasury stock method. Shares attributable |
EARNINGS PER SHARE
EARNINGS PER SHARE | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
EARNINGS PER SHARE | 2. EARNINGS PER COMMON SHARE As mentioned in the New Accounting Pronouncements section of Note 1, the Company adopted the provisions of FSP No. EITF 03-6-1 effective October1,2009. EPS and diluted shares outstanding amounts for the quarter and six months ended March31,2009 have been restated to reflect the retrospective application of the FSP. The effect of adoption reduced basic EPS by $0.02 and $0.03 for quarter and six months ended March31,2009, respectively, and reduced diluted EPS by $0.01 and $0.02 for the quarter and six months ended March31,2009, respectively, compared to originally reported amounts. Reported net income and cash flows were not affected by the adoption of the FSP. For details on the methodology used to compute EPS, see the Earnings Per Common Share section of Note 1. Three Months Ended Six Months Ended March 31, March 31, (Thousands, Except Per Share Amounts) 2010 2009 2010 2009 Basic EPS: Net Income $ 28,020 $ 30,811 $ 50,906 $ 62,117 Less: Income allocated to participating securities 280 340 508 660 Net Income Available to Common Shareholders $ 27,740 $ 30,471 $ 50,398 $ 61,457 Weighted Average Shares Outstanding 21,980 21,891 21,968 21,874 Earnings Per Share of Common Stock $ 1.26 $ 1.39 $ 2.29 $ 2.81 Diluted EPS: Net Income $ 28,020 $ 30,811 $ 50,906 $ 62,117 Less: Income allocated to participating securities 279 339 508 658 Net Income Available to Common Shareholders $ 27,741 $ 30,472 $ 50,398 $ 61,459 Weighted Average Shares Outstanding 21,980 21,891 21,968 21,874 Dilutive Effect of Stock Options and Restricted Stock 47 78 46 89 Weighted Average Diluted Shares 22,027 21,969 22,014 21,963 Earnings Per Share of Common Stock $ 1.26 $ 1.39 $ 2.29 $ 2.80 Outstanding Shares Excluded from the Calculation of Diluted EPS Attributable to: Antidilutive stock options 77 77 Performance-contingent restricted stock 145 60 145 60 Total 222 60 222 60 |
PENSION PLANS AND OTHER POSTRET
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS | 3. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS Pension Plans Laclede Gas has non-contributory, defined benefit, trusteed forms of pension plans covering substantially all employees. Effective January1,2009, the Utility modified the calculation of future benefits under Laclede Gas primary plan from a years of service and final average compensation formula to a cash balance formula, which accrues benefits based on a percentage of compensation. Benefits attributable to plan participation prior to January1,2009 will be based on final average compensation at the date of termination of employment and years of service earned at January1,2009. Effective January1,2010, the Utility modified the calculation of future benefits under its Missouri Natural Gas division plan from a career average formula to a cash balance formula, which accrues benefits based on a percentage of compensation and provides interest credits on the balance. Benefits attributable to plan participation prior to January1,2010 will be based on career average compensation earned as a participant prior to January1,2010. Plan assets consist primarily of corporate and U.S. government obligations and equity investments. Pension costs for the quarters ending March31,2010 and 2009 were $1.6 million and $1.5 million, respectively, including amounts charged to construction. Pension costs for the six months ended March31,2010 and 2009 were $3.2 million and $3.1 million, respectively, including amounts charged to construction. The net periodic pension costs include the following components: Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2010 2009 2010 2009 Service cost benefits earned during the period $ 2,189 $ 1,817 $ 4,463 $ 5,302 Interest cost on projected benefit obligation 4,924 5,229 9,881 10,497 Expected return on plan assets (5,075 ) (5,234 ) (10,107 ) (10,469 ) Amortization of prior service cost 172 259 411 518 Amortization of actuarial loss 2,025 774 4,059 1,548 Sub-total 4,235 2,845 8,707 7,396 Regulatory adjustment (2,657 ) (1,296 ) (5,550 ) (4,298 ) Net pension cost $ 1,578 $ 1,549 $ 3,157 $ 3,098 Pursuant to the provisions of the Laclede Gas pension plans, pension obligations may be satisfied by lump-sum cash payments. Pursuant to a Missouri Public Service Commission (MoPSC or Commission) Order, lump-sum payments are recognized as settlements (which can result in gains or losses) only if the total of such payments exceeds 100% of the sum of service and interest costs. No lump-sum payments were recognized as settlements during the six months ended March31,2010 and March31,2009. Pursuant to a MoPSC Order, the return on plan assets is based on the market-related value of plan ass |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 4. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts and estimated fair values of financial instruments are as follows: (Thousands) Carrying Amount Fair Value As of March31,2010 Cash and cash equivalents $ 83,765 $ 83,765 Marketable securities 12,083 12,083 Derivative instrument assets 14,600 14,600 Derivative instrument liabilities 436 436 Short-term debt 114,950 114,950 Long-term debt, including current portion 389,269 408,429 As of September30,2009 Cash and cash equivalents $ 74,591 $ 74,591 Marketable securities 11,110 11,110 Derivative instrument assets 17,178 17,178 Derivative instrument liabilities 976 976 Short-term debt 129,800 129,800 Long-term debt 389,240 423,375 The carrying amounts for cash and cash equivalents and short-term debt approximate fair value due to the short maturity of these instruments. The fair value of long-term debt is based on market prices for similar issues. The fair values of marketable securities, derivative instrument assets, and derivative instrument liabilities are valued as described in Note 5, Fair Value Measurements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
FAIR VALUE MEASUREMENTS | 5. FAIR VALUE MEASUREMENTS The following table categorizes the assets and liabilities in the Consolidated Balance Sheets that are accounted for at fair value on a recurring basis in periods subsequent to initial recognition. (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 March31,2010 Assets U. S. Stock/Bond Mutual Funds $ 12,083 $ $ $ $ 12,083 NYMEX natural gas contracts 10,953 3,303 14,256 NYMEX gasoline and heating oil contracts 233 (6 ) 227 Natural gas commodity contracts 303 40 (226 ) 117 Total $ 23,269 $ 303 $ 40 $ 3,071 $ 26,683 Liabilities NYMEX natural gas contracts $ 79,677 $ $ $ (79,677 ) $ Natural gas commodity contracts 607 55 (226 ) 436 Total $ 79,677 $ 607 $ 55 $ (79,903 ) $ 436 As of September30,2009 Assets U. S. Stock/Bond Mutual Funds $ 11,110 $ $ $ $ 11,110 NYMEX natural gas contracts 10,803 4,057 14,860 NYMEX gasoline and heating oil contracts 278 (1 ) 277 Natural gas commodity contracts 1,688 558 (205 ) 2,041 Total $ 22,191 $ 1,688 $ 558 $ 3,851 $ 28,288 Liabilities NYMEX natural gas contracts $ 55,170 $ $ $ (55,170 ) $ Natural gas commodity contracts 522 659 (205 ) 976 Total $ 55,170 $ 522 $ 659 $ (55,375 ) $ 976 As of March31,2009 Assets U. S. Stock/Bond Mutual Funds $ 8,325 $ $ $ $ 8,325 NYMEX natural gas contracts 10,377 19,812 30,189 NYMEX gasoline and heating oil contracts 144 163 307 Natural gas commodity contracts 156 156 Total $ 18,846 $ 156 $ $ 19,975 $ 38,977 Liabilities NYMEX natural gas contracts $ 112,929 $ $ $ (112,929 ) $ The mutual funds included in Level 1 ar |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Laclede Gas has a risk management policy that allows for the purchase of natural gas derivative instruments with the goal of managing price risk associated with purchasing natural gas on behalf of its customers. This policy prohibits speculation and permits the Utility to hedge up to 70% of its normal volumes purchased for up to a 36-month period. Costs and cost reductions, including carrying costs, associated with the Utilitys use of natural gas derivative instruments are allowed to be passed on to the Utilitys customers through the operation of its Purchased Gas Adjustment (PGA) Clause, through which the MoPSC allows the Utility to recover gas supply costs, subject to prudence review. Accordingly, Laclede Gas does not expect any adverse earnings impact as a result of the use of these derivative instruments. The Utility does not designate these instruments as hedging instruments for financial reporting purposes because gains or losses associated with the use of these derivative instruments are deferred and recorded as regulatory assets or regulatory liabilities pursuant to ASC Topic 980, Regulated Operations, and, as a result, have no direct impact on the Statements of Consolidated Income. The timing of the operation of the PGA clause may cause interim variations in short-term cash flows because the Utility is subject to cash margin requirements associated with changes in the values of these instruments. Nevertheless, carrying costs associated with such requirements are recovered through the PGA Clause. From time to time, Laclede Gas purchases NYMEX futures contracts to help stabilize operating costs associated with forecasted purchases of gasoline and diesel fuels used to power vehicles and equipment used in the course of its business. At March31,2010, Laclede Gas held 0.4 million gallons of gasoline futures contracts at an average price of $1.71 per gallon and 0.1 million gallons of heating oil futures contracts (to hedge diesel fuel purchases) at an average price of $2.22 per gallon. Most of these futures contracts, the longest of which extends to June2011, are designated as cash flow hedges of forecasted transactions pursuant to ASC Topic 815, Derivatives and Hedging. The gains or losses on these derivative instruments are not subject to the Utilitys PGA Clause. In the course of its business, Laclede Groups non-regulated gas marketing affiliate, Laclede Energy Resources, Inc. (LER), enters into commitments associated with the purchase or sale of natural gas. Many of LERs derivative natural gas contracts are designated as normal purchases or normal sales and, as such, are excluded from the scope of ASC Topic 815 and are accounted for as executory contracts on an accrual basis. Any of LERs derivative natural gas contracts that are not designated as normal purchases or normal sales are accounted for at fair value. At March31,2010, LER had 18.8 million MMBtu of non-exchange traded natural gas commodity contracts for which the normal purchases and normal sales scope exception was not elected. Of these contracts, 17.1 million MMBtu will settle during fiscal year 2010, while the |
CONCENTRATIONS OF CREDIT RISK
CONCENTRATIONS OF CREDIT RISK | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
CONCENTRATIONS OF CREDIT RISK | 7. CONCENTRATIONS OF CREDIT RISK A significant portion of LERs transactions are with (or are associated with) energy producers, utility companies, and pipelines. These concentrations of transactions with these counterparties have the potential to affect the Companys overall exposure to credit risk, either positively or negatively, in that each of these three groups may be affected similarly by changes in economic, industry, or other conditions. To manage this risk, as well as credit risk from large counterparties in other industries, LER has established procedures to determine the creditworthiness of its counterparties. These procedures include obtaining credit ratings and credit reports, analyzing counterparty financial statements to assess financial condition, and considering the industry environment in which the counterparty operates. This information is monitored on an ongoing basis. In some instances, LER may require credit assurances such as prepayments, letters of credit, or parental guarantees. In addition, LER may enter into netting arrangements to mitigate credit risk with counterparties in the energy industry from which LER both sells and purchases natural gas. Sales are typically made on an unsecured credit basis with payment due the month following delivery. Accounts receivable amounts are closely monitored, and provisions for uncollectible amounts are accrued when losses are probable. To date, losses have not been significant. LER records accounts receivable, accounts payable, and prepayments for physical sales and purchases of natural gas on a gross basis. The amount included in accounts receivable attributable to energy producers and their marketing affiliates amounted to $32.5 million, or 41.8% of LERs total accounts receivable at March31,2010. Net receivable amounts from these customers on the same date, reflecting netting arrangements, were $12.2 million. Accounts receivable attributable to utility companies and their marketing affiliates comprised $20.7 million of LERs total accounts receivable, or 26.6% at March31,2010 and net receivable amounts from these customers, reflecting netting arrangements, were $17.6 million. Additionally, LER has concentrations of credit risk with pipeline companies associated with its natural gas receivable amounts. |
OTHER INCOME AND INCOME
OTHER INCOME AND INCOME (DEDUCTIONS) NET | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
OTHER INCOME AND (INCOME DEDUCTIONS) - NET | 8. OTHER INCOME AND (INCOME DEDUCTIONS) NET Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2010 2009 2010 2009 Interest income $ 361 $ 663 $ 896 $ 1,802 Net investment gain (loss) 196 (205 ) 670 (1,574 ) Other income 25 28 25 305 Other income deductions (264 ) (239 ) 314 453 Other Income and (Income Deductions) Net $ 318 $ 247 $ 1,905 $ 986 The increase in Other Income and (Income Deductions) Net for the six months ended March31,2010, compared with the six months ended March31,2009, was primarily due to higher net investment gains, partially offset by lower income associated with carrying costs applied to under-recoveries of gas costs and lower interest income. Carrying costs on under-recoveries of gas costs are recovered through the Utilitys PGA Clause. |
INFORMATION BY OPERATING SEGMEN
INFORMATION BY OPERATING SEGMENT | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
INFORMATION BY OPERATING SEGMENT | 9. INFORMATION BY OPERATING SEGMENT All of Laclede Groups subsidiaries are wholly owned. The Regulated Gas Distribution segment consists of the regulated operations of Laclede Gas and is the core business segment of Laclede Group. Laclede Gas is a public utility engaged in the retail distribution and sale of natural gas serving an area in eastern Missouri, with a population of approximately 2.1 million, including the City of St. Louis and parts of ten counties in eastern Missouri. The Non-Regulated Gas Marketing segment includes the results of LER, a subsidiary engaged in the non-regulated marketing of natural gas and related activities. Other includes Laclede Pipeline Companys transportation of liquid propane regulated by the Federal Energy Regulatory Commission (FERC) as well as non-regulated activities, including real estate development, the compression of natural gas, and financial investments in other enterprises. These operations are conducted through five subsidiaries. Other also includes Laclede Gas non-regulated merchandise sales business, which was not material, and its non-regulated sale of propane. The merchandise sales business ceased operations on September30,2009. Certain intersegment revenues with Laclede Gas are not eliminated in accordance with the provisions of ASC Topic 980. Those types of transactions include sales of natural gas from Laclede Gas to LER, sales of natural gas from LER to Laclede Gas, and transportation services provided by Laclede Pipeline Company to Laclede Gas. These revenues are shown on the Intersegment revenues lines in the table under Regulated Gas Distribution, Non-Regulated Gas Marketing, and Other columns, respectively. As Laclede Groups non-regulated subsidiary, LER, continues to expand its business, the number of transactions accounted for through fair value measurements has increased. Beginning this fiscal year, management evaluates the performance of the operating segments based on the computation of net economic earnings. Net economic earnings exclude from reported net income the after-tax impact of net unrealized gains and losses on energy-related derivative contracts. For comparative purposes, the measurement of segment performance has been presented to conform to the current-period presentation. Non- Regulated Regulated Gas Gas (Thousands) Distribution Marketing Other Eliminations Consolidated Three Months Ended March 31, 2010 Revenues from external customers $ 373,198 $ 252,321 $ 73 $ $ 625,592 Intersegment revenues 322 9,152 259 9,733 Total Operating Revenues 373,520 261,473 332 635,325 Net Economic Earnings 23,440 3,787 96 27,323 Total assets 1,630,495 193,967 117,820 (111,377 ) 1,830,905 Six Months Ended |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
6 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Commitments Laclede Gas and LER have entered into various contracts, expiring on dates through 2017, for the storage, transportation, and supply of natural gas. Minimum payments required under the contracts in place at March31,2010 are estimated at approximately $1.0 billion. Additional contracts are generally entered into prior to or during the heating season. Laclede Gas recovers its costs from customers in accordance with the PGA Clause. Leases and Guarantees Laclede Gas has several operating leases for the rental of vehicles that contain provisions requiring Laclede Gas to guarantee certain amounts related to the residual value of the leased property. These leases have various terms, the longest of which extends into 2015. At March31,2010, the maximum guarantees under these leases are $1.5million. However, the Utility believes it is unlikely that it will be subject to the maximum payment amount because it estimates that the residual value of the leased vehicles will be adequate to satisfy most of the guaranteed amounts. At March31,2010, the carrying value of the liability recognized for these guarantees was $0.4million. Laclede Group had guarantees totaling $98.3 million for performance and payment of certain wholesale gas supply purchases by LER, as of March31,2010. Since that date, guarantees issued by Laclede Group on behalf of LER increased by $4.0 million, bringing the total to $102.3 million in guarantees at April30,2010. No amounts have been recorded for these guarantees in the financial statements. As of March31,2010, management believes the probability is low that Laclede Group will be required to make payments under these guarantees. Contingencies and Indemnifications Laclede Gas owns and operates natural gas distribution, transmission, and storage facilities, the operations of which are subject to various environmental laws, regulations, and interpretations. While environmental issues resulting from such operations arise in the ordinary course of business, such issues have not materially affected the Companys or Laclede Gas financial position and results of operations. As environmental laws, regulations, and their interpretations change, however, Laclede Gas may be required to incur additional costs. As with other companies, Laclede Gas faces the risk of environmental liabilities. In the natural gas industry, these are typically associated with sites formerly owned or operated by gas distribution companies like Laclede Gas and/or its predecessor companies at which manufactured gas operations took place. At this time, Laclede Gas has identified three former manufactured gas plant (MGP) sites located in Missouri: one in Shrewsbury and two in the City of St. Louis. To date, amounts required for remediation at these sites have not been material. However, the amount of costs relative to future remedial actions at these and other sites is unknown and may be material. In 2005, the Utilitys outside consultant completed an analysis of the MGP sites to determine cost estimates for a one-time contractual transfer of risk from each of the Utilitys insurers of environmental coverage for |
Document Information
Document Information | |
6 Months Ended
Mar. 31, 2010 | |
Documentation Information [Text Block] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | 2010-03-31 |
Entity Information
Entity Information (USD $) | |||
6 Months Ended
Mar. 31, 2010 | Apr. 29, 2010
| Mar. 31, 2009
| |
Entity [Text Block] | |||
Entity Registrant Name | LACLEDE GROUP INC | ||
Entity Central Index Key | 0001126956 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $806,025,946 | ||
Entity Common Stock Shares Outstanding | 22,281,309 | ||
Document Fiscal Year Focus | 2,010 | ||
Document Fiscal Period Focus | Q2 |