NEWS RELEASEContact: Jessica Willingham
(314) 342-3300/jwillingham@lacledegas.com
FOR IMMEDIATE RELEASE
The Laclede Group Reports Strong Third Quarter Earnings
Company Declares Quarterly Dividend
ST. LOUIS (July 29, 2011) – The Laclede Group, Inc. (NYSE: LG) today reported consolidated net income of $15.4 million, or $0.69 diluted earnings per share, for its third fiscal quarter ending June 30, 2011 compared to $4.7 million, or $0.21 per share, for the same quarter last year. On a non-GAAP basis, the Company reported third-quarter net economic earnings of $14.6 million, or $0.65 per share, compared to $4.4 million, or $0.20 per share, for the same quarter last year. A chart of net economic earnings follows, summarizing the Company’s strong results.
For the first nine months of fiscal 2011, The Laclede Group reported net income totaling $66.7 million, or $2.98 per share, compared to $55.6 million, or $2.50 per share, for the same period last year. For the nine months ended June 30, 2011, net economic earnings were $65.5 million, or $2.93 per share, compared to $57.5 million, or $2.59 per share, for the same period last year.
The Company’s operating results for both periods continued to reflect 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.
“Laclede Gas continues to perform very well, and we remain diligent in our focus to enhance customer service while achieving additional operating efficiencies,” said Douglas H. Yaeger, chairman, president and chief executive officer of The Laclede Group. “Laclede Group as a whole is achieving strong results even as LER adapts business strategies to the realities of the marketplace.”
In connection with Mr. Yaeger’s previously announced transition to retirement, the board elected Ms. Suzanne Sitherwood as president of The Laclede Group last month and yesterday elected her to the board effective September 1, 2011. Additionally, the board declared a quarterly dividend of 40 ½ cents per share on its common stock, payable October 4, 2011 to shareholders of record on September 12, 2011.
RESULTS OF OPERATIONS
Laclede Gas Company
Laclede Gas Company reported a year-over-year increase in net income of $11.6 million for the third quarter of 2011. On a diluted earnings per share basis, Laclede Gas contributed $0.52 to the Company’s consolidated earnings for the third quarter, compared to break-even performance for the year-ago quarter. This year’s third-quarter performance was positively impacted by the non-regulated sale of propane inventories no longer required to serve utility customers. This transaction resulted in net income totaling $6.1 million. The higher year-over-year earnings also reflected the general rate increase that went into effect September 1, 2010.
NEWS RELEASE: The Laclede Group Reports Strong Third Quarter Earnings
For the nine months ended June 30, 2011, Laclede Gas Company reported increased net income of $14.7 million compared to the same period last year. The improved performance resulted from the beneficial impacts of the general rate case, the higher net earnings from non-regulated propane transactions in 2011 and 2010, and operating efficiencies.
Laclede Energy Resources
Laclede Energy Resources reported net income of $3.5 million for the third quarter of 2011, compared to $4.4 million for the same quarter last year. On a year-to-date basis, LER’s net earnings for 2011 were $7.2 million as compared with $10.6 million for the same period last year. LER’s net economic earnings for the third quarter of 2011 were $2.7 million and $6.0 million year-to-date. The decreases in both reporting periods were primarily due to lower natural gas sales volumes and reduced margins, driven mainly by narrow regional price differentials and limited price volatility that have prevailed throughout the year and become the norm in the marketplace.
NEW CREDIT AGREEMENTS
On July 18, 2011, The Laclede Group and Laclede Gas Company each entered into new revolving loan agreements, replacing existing arrangements due to expire later this year. Both new agreements have 5-year terms with three 1-year extension options. The Laclede Group’s credit facility provides for a credit commitment of $50 million, with an added $25 million accordion feature that allows for the facility to increase with lender approval. The loan agreement for Laclede Gas Company provides $300 million in credit, with an additional accordion feature of $100 million.
Laclede Group currently has no external borrowings under its credit facilities, as all short-term cash needs are being met with internally-generated funds.
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 2011 third-quarter results, 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 nearly 630,000 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
NEWS RELEASE: The Laclede Group Reports Strong Third Quarter Earnings
complete description of these uncertainties and risk factors, see the Company’s Form 10-Q for the quarter ended March 31, 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 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 (Non-GAAP) | Add: Unrealized Gain (Loss) (1) | Net Income (GAAP) | | Net Economic EPS (2) (Non-GAAP) | Diluted EPS (GAAP) |
| | | | | | | | | | | | | | | | | | |
Quarter Ended June 30, 2011 | | | | | | | | | | | | | | | | | |
| | Laclede Gas Company | $ | 11.6 | | $ | — | | $ | 11.6 | | | | $ | 0.52 | | $ | 0.52 | |
| | Laclede Energy Resources, Inc. | | 2.7 | | | 0.8 | | | 3.5 | | | | | 0.12 | | | 0.16 | |
| | Other | | 0.3 | | | — | | | 0.3 | | | | | 0.01 | | | 0.01 | |
| | Total | $ | 14.6 | | $ | 0.8 | | $ | 15.4 | | | | $ | 0.65 | | $ | 0.69 | |
| | Per Share Amounts (2) | $ | 0.65 | | $ | 0.04 | | $ | 0.69 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Quarter Ended June 30, 2010 | | | | | | | | | | | | | | | | | |
| | Laclede Gas Company | $ | — | | $ | — | | $ | — | | | | $ | — | | $ | — | |
| | Laclede Energy Resources, Inc. | | 4.1 | | | 0.3 | | | 4.4 | | | | | 0.18 | | | 0.20 | |
| | Other | | 0.3 | | | — | | | 0.3 | | | | | 0.02 | | | 0.01 | |
| | Total | $ | 4.4 | | $ | 0.3 | | $ | 4.7 | | | | $ | 0.20 | | $ | 0.21 | |
| | Per Share Amounts (2) | $ | 0.20 | | $ | 0.01 | | $ | 0.21 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Nine Months Ended June 30, 2011 | | | | | | | | | | | | | | | | | |
| | Laclede Gas Company | $ | 59.2 | | $ | — | | $ | 59.2 | | | | $ | 2.65 | | $ | 2.65 | |
| | Laclede Energy Resources, Inc. | | 6.0 | | | 1.2 | | | 7.2 | | | | | 0.27 | | | 0.32 | |
| | Other | | 0.3 | | | — | | | 0.3 | | | | | 0.01 | | | 0.01 | |
| | Total | $ | 65.5 | | $ | 1.2 | | $ | 66.7 | | | | $ | 2.93 | | $ | 2.98 | |
| | Per Share Amounts (2) | $ | 2.93 | | $ | 0.05 | | $ | 2.98 | | | | | | | | | |
Nine Months Ended June 30, 2010 | | | | | | | | | | | | | | | | | |
| | Laclede Gas Company | $ | 44.6 | | $ | (0.1 | ) | $ | 44.5 | | | | $ | 2.00 | | $ | 2.00 | |
| | Laclede Energy Resources, Inc. | | 12.4 | | | (1.8 | ) | | 10.6 | | | | | 0.56 | | | 0.48 | |
| | Other | | 0.5 | | | — | | | 0.5 | | | | | 0.03 | | | 0.02 | |
| | Total | $ | 57.5 | | $ | (1.9 | ) | $ | 55.6 | | | | $ | 2.59 | | $ | 2.50 | |
| | Per Share Amounts (2) | $ | 2.59 | | $ | (0.09 | ) | $ | 2.50 | | | | | | | | | |
(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 June 30, 2011 and 2010, the amounts of income tax expense included in the consolidated reconciling items above are $0.5 million and $0.2 million, respectively. For the nine months ended June 30, 2011 and 2010, the amounts of income tax expense (benefit) included in the consolidated reconciling items above are $0.7 million and $(1.2) 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: The Laclede Group Reports Strong Third Quarter Earnings
STATEMENTS OF CONSOLIDATED INCOME--UNAUDITED
THE LACLEDE GROUP, INC.
(Thousands, Except Per Share Amounts)
| | | | Three Months Ended June 30 | | Nine Months Ended June 30 |
| | | 2011 | | 2010 | | 2011 | | 2010 |
| | | | | | | | | | | | | | | | | |
| OPERATING REVENUES | | | | | | | | | | | | | | | | |
| | Regulated Gas Distribution | | $ | 151,423 | | | $ | 124,745 | | | $ | 817,241 | | | $ | 781,194 | |
| | Non-Regulated Gas Marketing | | | 174,309 | | | | 199,307 | | | | 495,828 | | | | 658,305 | |
| | Other | | | 18,549 | | | | 455 | | | | 19,192 | | | | 11,499 | |
| | Total Operating Revenues | | | 344,281 | | | | 324,507 | | | | 1,332,261 | | | | 1,450,998 | |
| OPERATING EXPENSES | | | | | | | | | | | | | | | | |
| | Regulated Gas Distribution | | | | | | | | | | | | | | | | |
| | Natural and propane gas | | | 76,632 | | | | 57,315 | | | | 510,703 | | | | 489,553 | |
| | Other operation expenses | | | 36,930 | | | | 33,227 | | | | 111,292 | | | | 108,469 | |
| | Maintenance | | | 5,932 | | | | 7,198 | | | | 18,513 | | | | 20,591 | |
| | Depreciation and amortization | | | 9,856 | | | | 9,396 | | | | 29,233 | | | | 28,144 | |
| | Taxes, other than income taxes | | | 12,332 | | | | 12,016 | | | | 52,766 | | | | 54,290 | |
| | Total Regulated Gas Distribution Operating Expenses | | | 141,682 | | | | 119,152 | | | | 722,507 | | | | 701,047 | |
| | Non-Regulated Gas Marketing | | | 168,580 | | | | 192,230 | | | | 484,235 | | | | 641,121 | |
| | Other | | | 8,265 | | | | 258 | | | | 9,071 | | | | 5,029 | |
| | Total Operating Expenses | | | 318,527 | | | | 311,640 | | | | 1,215,813 | | | | 1,347,197 | |
| Operating Income | | | 25,754 | | | | 12,867 | | | | 116,448 | | | | 103,801 | |
| Other Income and (Income Deductions) - Net | | | 157 | | | | (191 | ) | | | 2,469 | | | | 1,714 | |
| Interest Charges: | | | | | | | | | | | | | | | | |
| | Interest on long-term debt | | | 5,739 | | | | 6,146 | | | | 17,421 | | | | 18,437 | |
| | Other interest charges | | | 408 | | | | 631 | | | | 1,701 | | | | 1,720 | |
| | Total Interest Charges | | | 6,147 | | | | 6,777 | | | | 19,122 | | | | 20,157 | |
| Income Before Income Taxes | | | 19,764 | | | | 5,899 | | | | 99,795 | | | | 85,358 | |
| Income Tax Expense | | | 4,374 | | | | 1,168 | | | | 33,143 | | | | 29,721 | |
| Net Income | | $ | 15,390 | | | $ | 4,731 | | | $ | 66,652 | | | $ | 55,637 | |
| | | | | | | | | | | | | | | | | | |
| Average Number of Common Shares Outstanding: | | | | | | | | | | | | | | | | |
| | Basic | | | 22,120 | | | | 21,997 | | | | 22,087 | | | | 21,978 | |
| | Diluted | | | 22,188 | | | | 22,048 | | | | 22,160 | | | | 22,025 | |
| | | | | | | | | | | | | | | | | | |
| Basic Earnings Per Share of Common Stock | | $ | 0.69 | | | $ | 0.21 | | | $ | 2.99 | | | $ | 2.51 | |
| Diluted Earnings Per Share of Common Stock | | $ | 0.69 | | | $ | 0.21 | | | $ | 2.98 | | | $ | 2.50 | |
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NEWS RELEASE: The Laclede Group Reports Strong Third Quarter Earnings
