Exhibit 1
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NEWS RELEASE
THE LACLEDE GROUP
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720 OLIVE STREET, ST. LOUIS, MO 63101
CONTACT: Richard N. Hargraves
(314) 342-0652
FOR IMMEDIATE RELEASE
October 25, 2001
THE LACLEDE GROUP ANNOUNCES FISCAL 2001 RESULTS
ST. LOUIS, MO-- The Laclede Group, Inc. (NYSE: LG) today released
the earnings results for Laclede Gas Company's fiscal year 2001, the
12-month period ended September 30, 2001.
Effective October 1, 2001, The Laclede Group became the parent
company of Laclede Gas Company. Accordingly, to the extent information in
this release relates to the year ended September 30, 2001, that information
relates entirely to Laclede Gas Company and not The Laclede Group.
The primary use for natural gas in Laclede's service area is for
residential and commercial heating. Colder weather results in increased
volumes of natural gas sold and transported, thus contributing to higher
earnings. Heating season temperatures in Laclede's service area during
fiscal 2001 were 10% colder than normal and 30% colder than in fiscal 2000 --
which was the third warmest heating season on record. As a result,
Laclede's earnings for fiscal 2001, at $1.61 per share, were up nearly 18%
over the Company's fiscal 2000 earnings of $1.37 per share.
However, the earnings benefit from the colder weather experienced
during fiscal year 2001 was offset by higher expenses that resulted from
last winter's record high wholesale natural gas prices. These included a
higher provision for uncollectible accounts
and higher carrying costs reflecting the interest and other costs incurred
by Laclede from the date it purchased gas in the wholesale market to the
time it received payment from its customers. Laclede does not benefit from
higher wholesale natural gas prices, which are set in a competitive national
market, but passes its actual purchased gas costs through to customers. In
addition to the increased costs related to last winter's high wholesale gas
prices, fiscal 2001 expenses were higher, when compared with fiscal 2000,
due to the formation of a holding company and other increased costs of doing
business.
Of the Company's $1.61 earnings, 29 cents per share were attributable
to Laclede's Gas Supply Incentive Program (GSIP). The GSIP is an incentive-
based program under which Laclede shared certain gains and losses related to
the acquisition and management of its gas supply assets in comparison to
established benchmarks. During fiscal 2001, Laclede's GSIP produced savings
to customers of $30.4 million and pre-tax income to shareholders of $9.0
million. These benefits, which were generated overwhelmingly by transactions
involving out-of-state natural gas producers and marketers, were used to help
lower the bills paid by Laclede's Missouri customers. The benefits were achieved
through new, innovative gas supply arrangements developed by Laclede, many of
which involved the Company assuming increased risk. The incentive structure
rewarded Laclede for its cost-savings effectiveness by permitting it to retain
for its shareholders a portion of the total gas cost savings it achieved. During
the five years of its operation, Laclede's GSIP has generated more than $160
million in benefits -- nearly 80% of which went to reduce customer costs.
Despite the fact that a Missouri Public Service Commission task
force has identified incentive programs as a way to control gas costs in the
State, the Commission recently decided to eliminate Laclede's GSIP. Laclede
has requested rehearing and
clarification on the decision and will evaluate the option of seeking
judicial review, if necessary, to retain this important method of holding
down gas costs within the current competitive national supply system.
For further details concerning Laclede's fiscal 2001 results, see
the accompanying unaudited Statement of Consolidated Income. The Laclede
Group's Annual Report to Shareholders for fiscal 2001 will be distributed in
mid-December.
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, 2001, filed with the Securities and Exchange
Commission.
UNAUDITED
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STATEMENTS OF CONSOLIDATED INCOME
LACLEDE GAS COMPANY
AND SUBSIDIARY COMPANIES
(In Thousands Except Per Share Amounts)
THREE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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2001 2000 2001 2000
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OPERATING REVENUES:
Utility operating revenues $ 78,465 $ 70,364 $ 929,517 $ 531,152
Non-utility operating revenues 12,976 10,806 72,592 34,976
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Total operating revenues 91,441 81,170 1,002,109 566,128
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OPERATING EXPENSES:
Utility operating expenses
Natural and propane gas 38,868 31,603 645,761 295,263
Other operation expenses 23,281 21,014 101,936 87,063
Maintenance 4,913 4,697 19,327 18,644
Depreciation and amortization 6,627 6,434 26,337 24,774
Taxes, other than income taxes 8,232 7,517 65,077 42,799
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Total utility operating expenses 81,921 71,265 858,438 468,543
Non-utility operating expenses 13,164 10,566 71,346 34,269
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Total operating expenses 95,085 81,831 929,784 502,812
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OPERATING INCOME (LOSS) (3,643) (661) 72,325 63,316
OTHER INCOME AND INCOME DEDUCTIONS - NET (39) (98) 1,417 762
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INCOME BEFORE INTEREST AND INCOME TAXES (3,682) (759) 73,742 64,078
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INTEREST CHARGES:
Interest on long-term debt 5,204 3,811 18,372 15,164
Other interest charges 987 2,479 10,067 8,844
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Total interest charges 6,191 6,290 28,439 24,008
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INCOME (LOSS) BEFORE INCOME TAXES (9,873) (7,049) 45,303 40,070
INCOME TAX EXPENSE (BENEFIT) (4,795) (3,657) 14,831 14,105
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NET INCOME (LOSS) (5,078) (3,392) 30,472 25,965
DIVIDENDS ON PREFERRED STOCK 21 23 87 93
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EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ (5,099) $ (3,415) $ 30,385 $ 25,872
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AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 18,878 18,878 18,878 18,878
EARNINGS (LOSS) PER SHARE OF COMMON STOCK ($0.27) ($0.18) $1.61 $1.37
NOTE: CERTAIN PRIOR-PERIOD AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM TO CURRENT-YEAR PRESENTATION.