NEWS RELEASE
THE LACLEDE GROUP
720 Olive Street, St. Louis, MO 63101
CONTACT: George Csolak
(314) 342-0652
FOR IMMEDIATE RELEASE
The Laclede Group Achieved Record Earnings for Sixth Consecutive Year
ST. LOUIS, MO, October 30, 2008 - The Laclede Group, Inc. (NYSE: LG) reported its sixth consecutive year of record earnings today.
| · | Strong performance by Laclede Group’s continuing operations, bolstered by the sale of a subsidiary, resulted in record fiscal year 2008 earnings. Laclede Group’s continuing operations and the sale of its underground facility locating and marking subsidiary, SM&P Utility Resources, Inc. (SM&P), provided the company with consolidated net income of $77.9 million for fiscal year 2008, which ended September 30, resulting in an increase of $28.2 million over fiscal year 2007. Diluted earnings per share for fiscal 2008 were $3.58, compared to $2.31 for fiscal 2007. The net effect of the one-time gain realized on the sale of SM&P last March and the impact of SM&P’s seasonal operating loss for the period prior to the sale amounted to $20.4 million of income from discontinued operations, contributing $.94 to diluted earnings per share for fiscal 2008. |
| · | Consolidated income from continuing operations demonstrated solid growth. For fiscal 2008, consolidated income from continuing operations totaled $57.5 million, compared to $45.7 million in fiscal 2007, demonstrating solid year-over-year growth in the Company’s ongoing business lines. Diluted earnings per share from continuing operations were $2.64 for fiscal 2008, compared with $2.12 for fiscal 2007. Continuing operations consist primarily of Laclede Group’s regulated gas distribution segment and its non-regulated gas marketing segment, both of which reported higher earnings for fiscal 2008. |
| · | Laclede Gas achieved improved results. Earnings reported by Laclede Group’s core subsidiary, Laclede Gas Company, Missouri’s largest natural gas distribution utility, were $39.2 million, an increase of $6.7 million over fiscal 2007. Laclede Gas contributed $1.80 to consolidated earnings per share for the twelve months ended September 30, 2008, compared to $1.51 for the same period last year. The improved results reflect the general rate increase that became effective August 1, 2007, and the effect of a reversal of tax-related expenses this fiscal year. The results were negatively impacted by higher operating and bad debt expenses, and a change in the sharing mechanism for off-system sales and capacity release revenues that also resulted from the 2007 general rate case. |
| · | Laclede Energy Resources, Inc. (LER) posted strong earnings growth. LER, Laclede Group’s non-regulated natural gas commodity service provider, reported earnings totaling $19.3 million for fiscal 2008, which were $5.9 million more than fiscal 2007. LER contributed $.88 to consolidated earnings per share for the twelve months ended September 30, 2008, compared to $.62 per share for the same period last year. The increased earnings were primarily due to improved margins and higher sales volumes on sales of natural gas and the effect of a reversal of tax-related expenses this fiscal year. |
For further details concerning The Laclede Group’s fiscal year 2008 results, see the accompanying unaudited Statements of Consolidated Income.
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 primary subsidiary, Laclede Gas Company, the regulated operations of which are included in the Regulated Gas Distribution segment, serves approximately 630,000 residential, commercial and industrial customers in the city of St. Louis and ten other counties in Eastern Missouri. Its primary non-regulated business is Laclede Energy Resources, Inc., a natural gas commodity service provider located in St. Louis Missouri, which is included in the Non-Regulated Gas Marketing segment. Laclede Group’s earnings are seasonal in nature and generally correspond with the heating season for Laclede Gas Company, its largest subsidiary.
For more information about Laclede Group and its subsidiaries, visit http://www.thelacledegroup.com.
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 June 30, 2008, filed with the Securities and Exchange Commission.
UNAUDITED
STATEMENTS OF CONSOLIDATED INCOME
THE LACLEDE GROUP, INC.
(Thousands, Except Per Share Amounts)
| | | | Three Months Ended September 30, | | Twelve Months Ended September 30, |
| | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | | | | | | | | | | | | | |
| OPERATING REVENUES | | | | | | | | | | | | | | | | |
| | Regulated Gas Distribution | | $ | 110,708 | | | $ | 103,777 | | | $ | 1,128,287 | | | $ | 1,131,554 | |
| | Non-Regulated Gas Marketing | | | 340,014 | | | | 170,616 | | | | 1,075,845 | | | | 718,704 | |
| | Other | | | 1,067 | | | | 1,416 | | | | 4,841 | | | | 5,603 | |
| | Total Operating Revenues | | | 451,789 | | | | 275,809 | | | | 2,208,973 | | | | 1,855,861 | |
| OPERATING EXPENSES | | | | | | | | | | | | | | | | |
| | Regulated | | | | | | | | | | | | | | | | |
| | Natural and propane gas | | | 56,834 | | | | 51,335 | | | | 770,097 | | | | 797,924 | |
| | Other operation expenses | | | 36,124 | | | | 32,019 | | | | 144,611 | | | | 131,798 | |
| | Maintenance | | | 7,235 | | | | 6,818 | | | | 25,827 | | | | 24,306 | |
| | Depreciation and amortization | | | 9,008 | | | | 8,450 | | | | 35,303 | | | | 34,080 | |
| | Taxes, other than income taxes | | | 8,538 | | | | 7,894 | | | | 69,023 | | | | 68,361 | |
| | Total Regulated Operating Expenses | | | 117,739 | | | | 106,516 | | | | 1,044,861 | | | | 1,056,469 | |
| | Non-Regulated Gas Marketing | | | 333,234 | | | | 167,465 | | | | 1,048,162 | | | | 698,962 | |
| | Other | | | 788 | | | | 978 | | | | 4,603 | | | | 5,376 | |
| | Total Operating Expenses | | | 451,761 | | | | 274,959 | | | | 2,097,626 | | | | 1,760,807 | |
| Operating Income | | | 28 | | | | 850 | | | | 111,347 | | | | 95,054 | |
| Other Income and (Income Deductions) - Net | | | (1,008 | ) | | | 1,410 | | | | 1,881 | | | | 6,813 | |
| Interest Charges: | | | | | | | | | | | | | | | | |
| | Interest on long-term debt | | | 4,974 | | | | 5,625 | | | | 19,851 | | | | 22,502 | |
| | Interest on long-term debt to unconsolidated affiliate trust | | | | | | | 69 | | | | 486 | | | | 277 | |
| | Other interest charges | | | 1,732 | | | | 2,956 | | | | 9,140 | | | | 11,155 | |
| | Total Interest Charges | | | 6,706 | | | | 8,650 | | | | 29,477 | | | | 33,934 | |
| Income (Loss) from Continuing Operations Before Income Taxes | | | | | | | | | | | | | | | | |
| | and Dividends on Laclede Gas Redeemable Preferred Stock | | | (7,686 | ) | | | (6,390 | ) | | | 83,751 | | | | 67,933 | |
| Income Tax Expense (Benefit) | | | (4,523 | ) | | | (3,964 | ) | | | 26,190 | | | | 22,146 | |
| Dividends on Laclede Gas Redeemable Preferred Stock | | | 8 | | | | 10 | | | | 35 | | | | 43 | |
| Income (Loss) from Continuing Operations | | | (3,171 | ) | | | (2,436 | ) | | | 57,526 | | | | 45,744 | |
| Income (Loss) from Discontinued Operations, Net of Income Tax | | | (423 | ) | | | 3,039 | | | | 20,396 | | | | 4,027 | |
| Net Income (Loss) | | $ | (3,594 | ) | | $ | 603 | | | $ | 77,922 | | | $ | 49,771 | |
| | | | | | | | | | | | | | | | | | |
| Average Number of Common Shares Outstanding | | | 21,785 | | | | 21,514 | | | | 21,657 | | | | 21,455 | |
| Basic Earnings (Loss) Per Share of Common Stock: | | | | | | | | | | | | | | | | |
| | Income (Loss) from Continuing Operations | | $ | (0.14 | ) | | $ | (0.11 | ) | | $ | 2.66 | | | $ | 2.13 | |
| | Income (Loss) from Discontinued Operations | | | (0.02 | ) | | | 0.14 | | | | 0.94 | | | | 0.19 | |
| | Net Income (Loss) | | $ | (0.16 | ) | | $ | 0.03 | | | $ | 3.60 | | | $ | 2.32 | |
| | | | | | | | | | | | | | | | | |
| Diluted Earnings (Loss) Per Share of Common Stock: | | | | | | | | | | | | | | | | |
| | Income (Loss) from Continuing Operations | | $ | (0.14 | ) | | $ | (0.11 | ) | | $ | 2.64 | | | $ | 2.12 | |
| | Income (Loss) from Discontinued Operations | | | (0.02 | ) | | | 0.14 | | | | 0.94 | | | | 0.19 | |
| | Net Income (Loss) | | $ | (0.16 | ) | | $ | 0.03 | | | $ | 3.58 | | | $ | 2.31 | |
Certain prior-period amounts have been reclassified to discontinued operations to conform to current-year presentation as a result of the sale of SM&P Utility Resources, Inc. (SM&P) during the second quarter of fiscal year 2008. Income (Loss) from Discontinued Operations does not include general corporate overhead expenses previously recorded by SM&P.
